The Central Bank of Oman (CBO) is said to be preparing to launch a government development bond (GDBs) issue worth OMR 200 million, according to Muscat Daily.
CBO executive president Hamood al Zadjali revealed that the Central Bank will announce the bond issue for the local market ‘within a few days’.
“The plan to issue bonds or sukuk next year will depend on the budget. Within a few days we will announce an issue of GDBs of about OMR 200 million for the Oman market. The bonds are expected to have a maturity of five years and the coupon rate will be fixed”, he told reporters on the sidelines of the Asian Bankers Association conference, adding that issuance will roll over OMR 100 million of debt, maturing this month, and will cover a budget deficit in 2014.
“Subscription may start towards the end of this month and be open for two weeks. We are still working on the details” Zadjali added.
“We hope it will happen next year based on the need of the government. Issuing Sukuk needs some sort of arrangement because it is not as straight forward as GDBs, which are much easier to launch. Unlike bonds, Sukuk have to be backed by assets. So the government has to choose what sort of assets are in demand that can be employed. It will be good instruments to invest in according to Sharia’a principles and regulation,” the CBO executive president revealed regarding a Sukuk issuance, highlighting that the Sultanate’s first sovereign Sukuk issuance is most likely to be directed towards the local market.
If the need arises, a global Sukuk issuance may be considered, he said.
CBO executive president Hamood al Zadjali revealed that the Central Bank will announce the bond issue for the local market ‘within a few days’.
“The plan to issue bonds or sukuk next year will depend on the budget. Within a few days we will announce an issue of GDBs of about OMR 200 million for the Oman market. The bonds are expected to have a maturity of five years and the coupon rate will be fixed”, he told reporters on the sidelines of the Asian Bankers Association conference, adding that issuance will roll over OMR 100 million of debt, maturing this month, and will cover a budget deficit in 2014.
“Subscription may start towards the end of this month and be open for two weeks. We are still working on the details” Zadjali added.
“We hope it will happen next year based on the need of the government. Issuing Sukuk needs some sort of arrangement because it is not as straight forward as GDBs, which are much easier to launch. Unlike bonds, Sukuk have to be backed by assets. So the government has to choose what sort of assets are in demand that can be employed. It will be good instruments to invest in according to Sharia’a principles and regulation,” the CBO executive president revealed regarding a Sukuk issuance, highlighting that the Sultanate’s first sovereign Sukuk issuance is most likely to be directed towards the local market.
If the need arises, a global Sukuk issuance may be considered, he said.
Source:
Mubasher
