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Oman Arab Bank (OAB) has priced its $400 million AT1 perpetual non-call 5.5-year Capital Securities at par, with a fixed rate resettable coupon of 6.75% paid semi-annually. Initial price thoughts were in the low 7% area.
The spread is set at 242.8 bps over US Treasuries, with a yield of 6.75% and a benchmark rate of 4.322%.
OAB, rated Baa3 by Moody’s and BBB- by S&P and Fitch (all with a stable outlook), saw investor demand drive the orderbook in excess of $1 billion at launch, excluding JLM interest.
The Regulation S issuance will list on the London Stock Exchange’s International Securities Market.
The bank, which is listed on the Muscat Stock Exchange and is 49% owned by Arab Bank and 31% by Oman International Development and Investment Company, last had an AT1 bond issuance in October 2023 through a private placement worth 50 million rials ($130 million), which included a green shoe option of OMR 10 million and carried a coupon of 7%.
Last week, OAB also announced the early redemption of its $250 million Perpetual Tier 1 Capital Securities on the first call date of June 4, 2026 at 100% of the principal amount. The offering was originally issued in 2021 and listed on the LSE’s ISM.
According to a Fitch report last week, about $10 billion of dollar AT1 instruments will reach their first call dates in 2026, with private placements to drive main funding for GCC banks this year if the US-Iran conflict persists.
(Writing by Bindu Rai, editing by Seban Scaria)
