Omantel’s sukuk issue gets ‘BB+’ rating from Fitch

Fitch Ratings has assigned Oman Telecommunications Company's (Omantel) $500mn senior unsecured trust certificates a final 'BB+' rating with a Recovery Rating of 'RR4'.

The sukuk was issued through the trustee, Otel Sukuk Limited (OSL). Oztel Holdings SPC Limited (Oztel) will act as guarantor to all of Omantel's obligations under the transaction documents. The instruments were priced at 5.375% maturing in January 2031. The ratings are in line with Omantel's Long-term Issuer Default Rating (IDR) and senior unsecured rating, Fitch said in a statement.

The rating agency said that the trust certificates' rating is aligned with the IDR of the ultimate parent and guarantor. 'This reflects Fitch's view that default of these senior unsecured obligations would reflect a default of Omantel in accordance with the agency's rating definitions,' it said.

According to Fitch, the sukuk instrument ratings are linked to Omantel's ratings due to its role as a seller under the purchase agreement, obligor, and service agent.

Fitch has given no consideration to any underlying assets or any collateral provided, as it believes the trustee's ability to satisfy payments due on the certificates ultimately depends on Omantel satisfying its unsecured payment obligations to the trustee under the transaction documents.

In addition to Omantel's propensity to ensure repayment of the sukuk, in Fitch's view, Omantel is required to ensure full and timely repayment of OSL'S obligations, due to its various roles and obligations under the sukuk structure and documentation.