7th APRIL 2015 - Vol.XXXVIII No.018
Business News

Bank's unit plans sukuk

MUSCAT: The Islamic unit of Bank Muscat, Oman's largest lender, plans a dual-currency US dollar and rial sukuk issue worth around $300 million that would be the first sukuk sale by a bank in the country.

The issue, which could carry tenors between three and five years, would be part of a 500m rial ($1.3 billion) sukuk programme, which the bank's shareholders approved in March, said Sulaiman Al Harthy, group general manager of Meethaq, Bank Muscat's Islamic operation.

He added, "The idea is to have the sukuk in dual currency since Omani rials are pegged to US dollar."

The sukuk, which would be the first international issuance of Islamic bonds from Oman and still require regulatory approval, would help to fund Meethaq's expansion.

"The sukuk issuance would be gradual and size would depend on the bank's funding needs. The debut sukuk size could be around $300m."

Last November, Omani real estate developer Tilal Development Company sold the first sukuk, raising 50m rials through a five-year deal. Meethaq estimates it has a 60 per cent share of Oman's fledgling Islamic banking sector, partly due to a home financing portfolio inherited from Bank Muscat.

click on image to view the digital edition