Omani firm plans sale of Islamic bonds

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Muscat

Omani conglomerate Golden Group plans to tap the market for sukuk, or Islamic bonds, for the first time later this year under a 200 million rials ($519.5 million) sukuk programme, according to the bank arranging the transaction. Corporate sukuk is viewed as an important step to help diversify the Sultanate’s Islamic finance sector, as sukuk markets rely heavily on issuance from sovereigns and financial institutions.
The company has hired the Islamic banking window of Bank Dhofar to arrange the transaction with a first tranche expected later this year, said Mohsin Shaik bin Sehu Mohammed, senior executive manager at Maisarah Islamic Banking Services. The size of the first tranche has yet to be determined, but it would have a five-year tenor and use an agency based structure known as wakala, he added.
Interest in sukuk as a funding option is growing as liquidity tightens in the conventional banking sector, with inquires on Islamic loan syndications also increasing, Mohammed said. Oman’s Islamic banking sector.—Agencies