Oman’s Ro100mn development bond issue 2.3 times oversubscribed

The 69th issue of Oman's government development bonds worth Ro100mn has been oversubscribed by 2.31 times, according to the Central Bank of Oman (CBO).

The CBO announced the auction results of the 69th government development bonds issue on Sunday, marking the first issuance of such bonds this year. Oman’s government has successfully raised Ro100mn through the issuance of government development bonds, which received an overwhelming response from investors.

According to a statement issued by the CBO’S Monetary Operations Department, the 69th issue of government development bonds received applications amounting to Ro231.72mn.

The three-year bond will be issued today and will mature on February 27, 2027, carrying a coupon rate of 4.90% per annum.

The issue was open for subscription from February 15 to February 22, 2024, with the auction held on February 25. The settlement date for the issue will be on February 27.

'The average yield was 4.94% at an equivalent price of RO99.890, while the highest yield was 5.20% at an equivalent price of RO99.175 and the lowest was at 4.00% at an equivalent price of RO102.520,' the CBO stated.

The development bonds issue was open to all investors, residents, and non-residents, irrespective of their nationality.

The bonds represent direct and unconditional obligations of the government of Oman, represented by the Ministry of Finance. These bonds can be utilised as collateral to obtain loans from any local commercial-licensed bank and can also be traded at prevailing market rates through the Muscat Stock Exchange.

According to the sultanate's 2024 budget estimates, the fiscal deficit for the 2024 budget is projected at Ro640mn, which is 6% of total revenue and 1.5% of GDP.

The deficit will be financed through internal and external borrowing of Ro240mn. The remaining deficit, estimated at approximately Ro400mn, will be covered through drawing on reserves, the Ministry of Finance said in January.