National Finance to launch Ro25mn bonds issuance

National Finance Company, the largest finance and leasing firm in Oman, announced on Wednesday that the subscription for its second tier 1 perpetual bond issuance will open on March 17, 2024.

The bonds issue size is up to Ro25mn (with a greenshoe option to increase the size up to Ro35mn) at an attractive coupon of 7.75%, the company said in a press statement.

The subscription will be open for a period of two weeks, closing on March 28, 2024, with a tentative issue date of April 3, 2024. The perpetual bonds will be denominated in Omani rial and listed on the Muscat Stock Exchange in compliance with applicable laws and regulations in Oman.

National Finance's perpetual bonds will be offered by private placement to sophisticated investors with a minimum investment amount of RO100,000 through a book-building method.

Bank Muscat is the anchor investor for the bonds offering and has agreed to purchase up to 50% of the issue size. Bank Muscat's Investment Banking, Oman’s premier investment banking team, is the sole issue manager for National Finance's bond issuance transaction.

National Finance said that the proposed bond issuance would further strengthen its balance sheet and enable the company to pursue growth initiatives in areas identified by the company.

National Finance had earlier issued its inaugural tier 1 perpetual bond in March 2018, which was successfully redeemed on the first call date, five years after issuance, i.e., March 15, 2023.

National Finance has delivered consistent shareholder returns, achieving one of the highest returns on equity among finance and leasing companies operating in Oman. The company boasts a widespread geographical presence across Oman, well-diversified product offerings, and a healthy financial profile backed by disciplined processes and a strong management team.

Tariq bin Sulaiman al Farsi, Chief Executive Officer of National Finance, said, “The finance and leasing sector plays an instrumental role in the development of an economy by providing a platform for inclusive growth and meeting the business requirements, especially of small and medium enterprises. The tier 1 perpetual bond offering is a unique opportunity to invest in this sector in Oman through a leading and strong entity. We look forward to welcoming new partners on our journey.”