Oman joins the queue of GCC bond market for first time

Dubai:  Oman plans to issue a sovereign dollar bond for the first time to plug a deficit left by tumbling oil prices.

The country has set price guidance of 262.5 basis points for the five year tranche, and 337.5 basis points for the 10-year period. This is compared to 250-300 basis points of price guidance set on Wednesday morning.

“This is for the first time that Oman will be coming to the international dollar-denominated bond market. They had a plenty issuance in local currency

Oman hasn’t had international bond for a long time,” Anita Yadav, head of fixed income research with Emirates NBD told Gulf News. About 80 per cent of Oman’s revenues come from oil, which does not have an active CDS in absence of a dollar denominated debt.

Appetite

Recently, the Qatar and Abu Dhabi bonds, which tested the investor appetite, were oversubscribed, and this has also triggered Qatar to front load its Eurobond issue to $7 billion from the earlier planned $5 billion.

“We expect Omani bonds to be included in the EM (Emerging Market) bond index which should attract investment interest from international investors, and with attractive pricing the deal could be oversubsriced,” she added. UAE, Bahrain, Qatar are already a part of EM bond index.

Citigroup, JP Morgan, MUFG, National Bank of Abu Dhabi and Natixis are joint lead managers. Oman has a BBB- from S&P with a stable outlook, and Baa1 with a stable outlook from Moody’s.

Meanwhile, Credit Default Swaps were widely unchanged, barring a 3 basis increase on CDS of Saudi British Bank to be at 223 basis points. Saudi Arabia stood stable at 167 basis points.