Bank Muscat’s US$500mn 5 year senior unsecured bond constitutes part of its Euro Medium Term Note (EMTN) programme. The issue has a coupon of 3.75%.
The Eurobond saw large demand from investors, with oversubscriptions on the bond totalling US$1.4bn, almost three times the amount of the issuance’s size.
The bond is the first senior unsecured issuance from an Omani bank since 2013. A senior banker speaking to Bonds & Loans said that there will be a revival in issuances from the GCC as market conditions in the region have improved, and that over the next 2 to 3 weeks there will be a window for successful issuances to take place.
Dr Jamil El Jaroudi, CEO of Bank Nizwa added that due to tighter domestic liquidity, many GCC entities would look to move away from the loan markets and into longer term financing strategies provided by bonds.
The joint lead managers and bookrunners on the deal included Bank ABC, CIB, HSBC, MUFG, NBAD, Bank Muscat, Standard Chartered, Credit Agricole and Citigroup. First Gulf Bank was a co-lead manager.
The fact that MUFG was a manager on the deal signifies the increasing participation of Asian banks in the Middle East.
“Asian entities are beginning to take an interest in the Middle East as the returns on offer are now higher than what they were able to achieve in their local markets,” El Jaroudi noted.
He stated that the aspirations of Asian entities to tap the Middle Eastern markets have existed for a while, but that these aims have only recently been put into practice.
Fabio Scacciavillani, Chief Economist at OMAN Investment Fund added that Asian banks are becoming increasingly interested in the Middle East, as they move away from the risks of low yielding debt in developed markets into emerging markets.
He noted that Asian banks see the relative stability of Middle Eastern markets as a safer entry into the emerging market space than others such as Brazil.
