Muscat – Oman has returned to international capital markets with a RO385mn ($1bn) sovereign sukuk issuance, marking its latest step in managing upcoming debt maturities.

The sukuk, which carries a 7.5-year tenor, priced at a yield spread of 60 basis points over US Treasuries and offers a 4.525% annual coupon, the Ministry of Finance said in a statement on X.

As per the ministry, the proceeds include RO117mn allocated to buy back, at par, part of the Eurobonds maturing in June 2026. The remaining RO268mn will go towards partially repaying international sukuk coming due in October 2025.

The sukuk issuance drew strong demand from regional and international investors, with the orderbook exceeding four times the offer size.

The Ministry of Finance said the transaction reflects renewed investor confidence in Oman’s fiscal position and its strengthened credit profile following recent upgrades to investment grade.

According to the ministry, the issuance will improve the sultanate’s debt metrics by refinancing a portion of near-term maturities at competitive rates and cutting 2026 redemptions by 12% through proactive liability management. It also supports broader risk-mitigation efforts by diversifying funding sources and smoothing the maturity profile.

The ministry said the deal underscores the effectiveness of Oman’s medium-term public debt strategy, which focuses on reducing debt-servicing costs, extending maturities and taking advantage of favourable market conditions.