Omani sukuk issued

In a turnaround from the Central Bank of Oman’s rejection of the debut sovereign sakk issuance (reported in UK Islamic Finance Law blog 24/9) the issue was brought to market with subscriptions closing on 22 October. It was an ijara sakk with a tenor of five years. According to Reuters the value of the sakk was OMR 200 m (USD520 m) attracted orders for OMR336 m ( 25 October 2015 — reporting by Fatma Alarimi, writing by Andrew Torchia ‘Oman’s first sovereign sukuk issue draws strong orders’). The sakk was listed only on the Muscat Securities Exchange. Linklater’s advised the Omani Ministry of Finance on this debut sovereign sukuk.

The Omani sukuk is evidence of how low oil prices suspected by some analysts to be reducing new sakk issues in the GCC may have the opposite effect, in the case of Oman (the treasury of which is heavily reliant on oil) to issue a sakk for the purpose of raising revenue for infrastructure projects and government funding needs.

The same article quoted the Ministry of Finance as stating that there would be a second sovereign issue next year although volume and timing were not yet known.

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