Oman raised $3 billion with its first foray in the international debt markets this year after receiving strong demand from global investors looking for high returns in a low yield environment.
The issuance was coordinated by Citigroup Global Markets Limited, First Abu Dhabi Bank together with JP Morgan Securities, MUFG Securities EMEA as well as Natixis, Société Générale and Standard Chartered Bank.
Clifford Chance, the Sultanate’s adviser on the issuance stated that investors made orders worth nearly $14 billion for papers offered at a final yield of 4.95 per cent for the long five-year bonds, due in February 2025 and six for the 10-year notes.
Oman issued $750 million in five year and $2.25 billion in 10-year bonds.
The country’s economy has been struggling since the collapse of oil prices in 2014, forcing the government to join other Gulf countries in tapping international debt markets to plug budget shortfalls.
In April 2019, S&P Global changed Oman’s outlook to negative while affirming its debt score at BB, two levels below investment grade, while in March Moody’s was the last of the three major rating agencies to grade the Sultanate to non-investment grade and Fitch Ratings has it at one level below investment grade.
Oman has been slow to implement fiscal reforms despite dwindling reserves, raising worry it could follow Bahrain in needing a bailout from wealthier Gulf neighbours.
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