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Oman to raise RO100mn via development bonds

9 Jan 2021

Oman is planning to raise RO100mn through this year’s first issuance of government development bonds as the government works to shore up its finances in light of lower oil revenues amid the global recession triggered by the coronavirus pandemic.

On behalf of the sultanate’s government, the Central Bank of Oman (CBO) is launching the 66th issue of the government development bonds by the auction method.

The value of the new development bonds issue is fixed at RO100mn with a maturity period of three years and the bonds will carry a coupon rate of 4.75 per cent per annum, the CBO said in a statement issued on Thursday. 

The bonds issue is open for subscription from today until January 17 while the auction will be held on January 18. Moreover, the settlement date for the issue will be on January 20 and interest on the new bonds will be paid semi-annually on July 20 and January 20 every year until maturity date on January 20, 2024.

As per the CBO’s statement, the 66th issue of the government development bonds is offered to all investors, residents and non-residents (irrespective of their nationality). Investors may apply for these bonds through the competitive bidding process only and may submit bids through commercial licensed banks operating in the sultanate. The bonds are being offered in the denomination of RO 100 and in multiples thereafter.

Investors with applications of RO1mn and above may submit their bids directly to the CBO, at their own discretion, after getting them endorsed from their banks. Prospectus and application forms can be obtained from any commercial licensed bank operating in the sultanate; or through CBO’s official website.

The government development bonds are direct and unconditional obligations of the government of the Sultanate of Oman, represented by the Ministry of Finance. The bonds can be used as collateral to obtain loans from any local commercial licensed bank and can also be traded at prevailing market rates through the Muscat Securities Market (MSM).

The development bonds provide an investment outlet for the surplus resources available in the economy and also help in financing capital expenditure of various development projects envisaged in the five year development plans.

The details of the bonds allotted will be recorded in the register maintained by Muscat Clearing and Depositary Company (MCD). ‘Therefore, investors must provide the same bank account details registered with MCD in order to ensure the smooth processing of their bids and the receipt of the coupon payments and principal amount on their scheduled dates,’ CBO said.

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