Bank Muscat has signed a sub-participation facility agreement with Petroleum Development Oman (PDO) to refinance or monetise the existing and future portfolio of home loans that PDO provides to its employees under a housing loan scheme.

This unique financing structure provides an efficient option for PDO to monetise the receivables of this portfolio to generate cash flow for operations and investments, Bank Muscat said in a press statement.

Sheikh Waleed K al Hashar, chief executive officer of Bank Muscat, said, “We are happy to strengthen the cooperation between the bank and PDO, the leading oil and gas producer in the sultanate. Under this agreement, while PDO continues to provide its employees housing loans as part of its employee value proposition, it will monetise or refinance the portfolio through the sub-participation facility provided by Bank Muscat.”

While PDO will continue to operationally administer the loans and cater to the needs of its employees under its relevant staff policies, the participation facility will enable it to release working capital tied up in staff loans, Hashar said.

He added that Bank Muscat collaborated with PDO to create an innovative structured solution to meet the objectives of this financing. 

“This shows Bank Muscat’s commitment to satisfy the needs of its clients and comes as a translation of the bank’s vision of ‘To serve you better, every day’,” Hashar said.

Hashar thanked the executive management of PDO for their confidence in the services and facilities of Bank Muscat that led to the successful closure of this landmark and bespoke transaction. He also thanked the Central Bank of Oman for their constant support to the bank and the regulatory guidance provided for the transaction.

Bank Muscat offers Baituna home finance that makes the dream of owning a home come true. The attractive features of Baituna home finance include a tenure up to 25 years.