Sohar Islamic, the Islamic banking window of Sohar International Bank, has successfully completed the issuance of RO6mn perpetual sukuk al Mudaraba trust certificate by Takaful Oman Insurance.
The perpetual sukuk has an initial yearly profit rate of 8.5 per cent, payable semiannually through Takaful Sukuk Specialized Purpose Company (SPC) established by Takaful Oman for this specific programme.
As the issue manager and financial advisor, Sohar Islamic played a pivotal role in ensuring the successful issuance and completion of the entire activity, Sohar International Bank said in a press statement. The placement of the issue was done through a private placement to select investors whilst receiving a strong interest from institutions, fund managers, and wealth management clients of the bank.
Ahmed al Musalmi, chief executive officer of Sohar International, said, “With a strong purpose that puts winning at the heart of everything done, we continue to deliver superior banking services showcasing our aspiration to bring the best of international to Oman. As part of our agile growth strategy, we have been pursuing more opportunities ultimately contributing positively to Oman’s economy. The bank strives to bring more value to the market and the current issuance is a testament to the same despite the challenging economic headwinds.”
The transaction represents a first-of-its-kind perpetual sukukprogramme established by a takaful company. Unfamiliarity with Mudaraba structures in the Omani sukuk market and the way the deferment of profit payments is structured under the programme added significant complexity to the transaction. Together with the support of the Capital Market Authority and Trowers&Hamlins as legal advisors, the issue was initiated and completed with immense success on all fronts.
Representing Takaful Oman, SayyidaRawan Ahmed al Said, chief executive officer, said, “The success of this issue illustrates investors’ strong confidence in Takaful Oman’s strategy and growth potential. It also underpins the large untapped growth potential in the Oman insurance sector in both traditional as well as the takaful space. The proceeds of the issue will be used to support growth in underwriting new business thereby contributing positively to the economy as a whole.”
The net proceeds of the certificates shall be used by Takaful Oman to strengthen the quality of its capital and for general corporate purposes. The securities are listed and admitted to trading on the Muscat Securities Market.
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