Posted by: amj_admin on October 5, 2020 - 4:37 am

AMJ acted as sole legal counsel to the Government of Oman (as obligor), Oman Sovereign Sukuk Company S.A.O.C. (as issuer) and bank muscat S.A.O.G. and its Islamic window, Meethaq Islamic Banking, (as issue manager and lead manager) on the update of the Government of Oman’s Omani Rial unlimited value sukuk issuance programme and the issuance of sukuk aggregating R.O. 200 million (US$519 million). This transaction involved the issuance of a third tranche of sukuk under the Government of Oman’s local sukuk issuance programme which followed the establishment of the programme and the issuance of the first two tranches of sukuk in late 2019 on which AMJ had also advised as sole Oman law counsel.

The issuance was undertaken in a single tranche of R.O. 200,000,000 sukuk with a tenure of six years and a profit rate of 5.25 per cent. per annum. The issuance closed on 21 September 2020 and was listed on the Muscat Securities Market.

In addition to the issuance being undertaken through the novel auction process and allocations having been made through a ‘differential pricing mechanism’, this was the first time that collecting banks with respect to the issuance were appointed by the Central Bank of Oman through a circular issued to all licenced Omani banks. AMJ, as part of its mandate, advised on the collecting banks’ appointment process and all transaction and structuring documents and liaised with the Capital Market Authority to finalise and obtain approvals for the update to the sukuk programme and the issuance of sukuk thereunder.

The AMJ team, which acted as sole legal advisor on this transaction, was led by Mansoor Malik (Senior Partner) and Asad Qayyum (Partner) who were supported by Hussein Azmy (Associate) and Fatma Al Maamary (Associate).

Posted by: amj_admin on January 16, 2019 - 4:42 pm

AMJ has advised the Oman Government and Sovereign Sukuk Company on the sale of US$1.5billion 5.92% sukuk certificates due 2025 and the update of its unlimited sukuk-al-ijara trust certificate issuance programme (Programme). The issue at the end of October 2018, received orders in excess of US$3.9bn according to Oman’s Ministry of Finance, and was rated BBB and Baa3, respectively by Moody’s and Fitch credit rating agencies.

The AMJ team was led by senior partner, Mansoor Malik supported by senior associate Asad Qayyum and associate Khalid Al Abri.  Clifford Chance acted as international counsel to the Government and issuer.

This is the second issuance under the Programme set up in 2017. AMJ also advised on the Oman law aspects of establishing the Programme and the subsequent drawdown of US$2 billion trust certificates which settled on 1 June 2017 and which marked the largest-ever sukuk issuance by the Sultanate.

This sukuk issue is Oman’s second foray into the international debt capital markets in 2018 following a jumbo US$6.5 billion conventional bond issue in January 2018, the country’s largest ever debt sale. Listed on Euronext Dublin (formerly the Irish Stock Exchange, the bond was sold in tranches of $1 billion 3.875% notes due 2022, $2 billion 5.375% notes due 2027, and $2 billion 6.5% notes due 2047. AMJ acted as Oman counsel for the Government on the establishment of a Global Medium Term Note Programme for Oman and the jumbo bond issuance thereunder.

AMJ’s team comprised senior partner, Mansoor Malik supported by senior associate Asad Qayyum. Clifford Chance acted as international counsel to the Government and issuer.

Posted by: amj_admin on March 30, 2018 - 8:27 pm

AMJ’s Islamic Finance team advised on two of the winning deals in the IFN Awards Deals of the Year 2017 ceremony held at the Ritz Carlton in Dubai on March 11.

The annual IFN Awards, now in the 12th edition, recognise excellence and innovation in the global Islamic Finance industry.

The Oman Deal of the Year was awarded to Oman Government for its US$2 billion 144A Sovereign Sukuk and the Ijarah Deal of the Year was awarded to Mazoon Electricity Company for its US$500 million 144A/Reg S Sukuk.

The winning deals were selected from a total of 425 nominations from across the world.

AMJ advised the Government of Oman and the issuer, Oman Sovereign Sukuk Company, on the Omani law aspects of the Oman Deal of the Year, the Sultanate’s maiden international public sukuk issuance in June 2017. The issuance was the debut issuance under the Sultanate’s first-ever trust certificates issuance program on which AMJ also advised. The deal is further noteworthy for being the second-largest US dollar Sukuk issued out of the GCC since July 2012.

On the Ijarah Deal of the Year awarded to Mazoon Electricity Company, AMJ acted as Oman Counsel for the joint lead managers and issuers. The US$500 million Reg S/144A Sukuk was the first international corporate sukuk issue out of Oman, and the first Reg S/144A corporate sukuk out of the MENA region since May 2016. The deal is also the first-ever Sukuk from the regulated electricity distribution sector which required detailed discussions with the regulator on structuring the transaction in order to comply with the restrictions of the Oman’s Sector Law.

The corporate deal also demonstrated the efficacy of Oman’s Sukuk law, which uses an SPV in lieu of a trust. The concept and structure were not deterrents to global and US investors who respectively took up 30% and 13% of the deal.The fact that both the award-winning deals were well-received by investors which should instil confidence in Omani institutions and corporates for the success of future transactions in the global market.

The IFN Deal of the Year 2017 awards, which were for the first time hosted as a part of IFN’s World Leaders Summit, assembled CEOs and decision-makers from Islamic financial institutions, top business leaders, policymakers, legal experts, economists and thought leaders from key Shariah finance markets around the world.

Mansoor Malik led AMJ’s team supported by senior Islamic Finance associate Asad Qayyum. AMJ was previously awarded the IFN’s global Sovereign Deal of the Year award for its advisory role on Oman’s OMR250million inaugural sovereign sukuk issuance in 2015.

Posted by: amj_admin on March 29, 2018 - 8:18 pm

Oman’s Capital Market Authority (CMA) issued the regulatory framework (Regulation) for the introduction and trading of real estate investment trusts (REITs) in early January 2018.

Oman joins the UAE, Saudi Arabia and Bahrain as GCC countries which have established REIT regulations. REITs have gained popularity in GCC countries in recent years as a mechanism for smaller investors to invest in real estate while offering real estate companies access to a larger pool of investors to fund acquisitions and development projects via capital markets.

The keenly-awaited Regulation contains detailed guidelines for setting-up, managing and operating REITs. It expands existing rules on investment funds in the CMA’s Executive Regulations (Decision 1/2009). The Regulation governs both conventional and shariah-compliant REITs and allows for different structures such as closed-end REITs, public REITs and special REITs. Under the Regulation, a REIT must have a minimum paid-up capital of OMR10 million, offer at least 40% of units to the public in the case of a public REIT, and pay a minimum of 90% of the net annual profits as a dividend to unit holders. In contrast to other jurisdictions which limit foreign ownership to 49%, international investors can own up to 100% of a REIT set up in the Sultanate.

REITs may invest only in real estate properties, special purpose vehicles, assets (whether or not they relate to real estate), monetary amounts, deposits and financial instruments. The Regulation contains a number of specific restrictions on permitted investment activities. For example, a REIT may not offer credit facilities, purchase vacant land, nor invest more than a certain percentage of its asset value outside Oman. In all cases, a minimum 50% of the total value of the REIT’s assets has to be invested in income-generating real estate and/or special purpose vehicles.

The stricter regulatory framework for REITs in comparison to direct investment in a real estate asset or investment via a fund should increase transparency in the real estate market where visibility around asset performance, ownership and legislation are key to attracting capital. The significance and potential of REITS in Oman as a vehicle for driving investment and liquidity in the real estate industry, as well as boosting capital market activity, was identified by Tanfeedh — Oman’s National Programme for Enhancing Economic Diversification — as one of nearly 100 economic initiatives for implementation over the short term.

For more information, contact Ardeshir Patel or Asad Qayyum.

Posted by: amj_admin on March 20, 2018 - 6:18 am

AMJ partnered the Islamic Finance News in staging a successful third Oman Forum at the Grand Millennium, Muscat on March 13. The day-long annual event attracted a record number of industry players, regulators and legal experts gathered to deliberate the future of Islamic retail banking, capital markets and takaful in Oman. In his keynote address to an audience of more than 200 bankers, issuers and other key stakeholders from across the Middle East, Europe and Asia, new Central Bank of Oman chief, Tahir Salim Al Amri, noted that while Islamic banking in Oman accounted for OMR 3.03bn (12.9 per cent) of total banking assets at the end of 2017, the impressive growth trajectory of the segment shows signs of tapering. He urged Islamic banks and windows to focus on innovation and the introduction of new sharia-compliant financial products and services that are not clones of conventional banking offerings. This recurrent theme had been highlighted by AMJ’s managing partner, Mansoor Jamal Malik  in the 2017 Forum when he called for alternative investment products to maintain growth and create a vibrant and sustainable market.

During the course of the day, a high-level line-up of speakers participated in a series of panel discussions, case studies and presentations, on the opportunities and challenges in the Islamic market for both capital-raising and investment. Senior associate, Asad Qayyum , participated in a panel session of experts discussing the sharia-compliant project finance structures and future of Oman’s Islamic capital markets.

Posted by: amj_admin on February 4, 2018 - 8:12 am

AMJ acted as Oman counsel to the issue manager and joint lead manager on the debut sukuk offering by Mazoon Electricity Company S.A.O.C. The landmark transaction marks the first international corporate sukuk issue out of Oman, and the first Reg S/144A corporate sukuk out of the MENA region since May 2016.

The ten-year Reg-S/144A sukuk certificates were successfully priced on 1 November 2017 and the profit rate for the certificates was set at 5.2 per cent.

The sukuk offering was based on the Shariah-compliant ijarah structure and the certificates were rated Baa2 (negative) by Moody’s Investor Services and BBB(negative) by Fitch Ratings.

Robust investor demand translated into a final order-book of approximately US$5bn from 300 orders, representing more than ten times oversubscription. The sukuk certificates were listed on the Irish Stock Exchange. The issuance was managed by Mazoon Electricity Company and Nama Holding along with JP Morgan Securities plc, Bank Muscat, KFH Capital Investment and First Abu Dhabi Bank acting as joint lead managers and Noor Bank and Warba Bank acting as co-managers.

The fundraising programme is expected to support the Mazoon Electricity group’s electricity transmission and distribution networks investments in Oman.

Mansoor Malik led AMJ’s team which included senior Islamic Finance associate Asad Qayyum. AMJ’s dedicated Islamic Finance team, the only one of its kind in Oman, has acted on a number of sukuk issuances in Oman in recent years including the Oman government’s US$2 billion international sukuk in 2017, US$500 million international sukuk in 2016 and the global award-winning US$650 million maiden sovereign sukuk in 2015.

Posted by: amj_admin on January 16, 2018 - 10:46 am

Oman’s Capital Market Authority (CMA) has published new rules for the marketing of insurance and takaful products in Oman (Decision E/69/2017). These replace the previous rules issued in 1983.

The new rules introduce a raft of additional requirements including:
– obliging insurers to complete CMA-issued application forms;
– expanding the documentation that an insurer needs to furnish in support of its application for product approval including: policy documents in Arabic, or Arabic translations (which are deemed to override their English counterparts); the insurer’s pricing policy for the product (which must be consistent with the insurer’s board approved underwriting and pricing policy); and marketing materials for the policy;
– recognition of fairness standards, which oblige insurers to ensure that policy documentation is balanced and fair;
– introduction of a time-bound application process (30 days in which to complete the application process from initial filing) and response process (30 days from filing of a complete application for the CMA to respond); and
– levying fees which insurance companies are required to pay the CMA for scrutiny of the product application (OMR 100) and for marketing it in Oman (OMR 500).

While overall the new rules bring structure to the previous practice-driven approach to obtaining CMA approval for marketing new products, insurers are likely to need further guidance on matters not specifically addressed by them. These include the procedure to be followed upon a refusal or deemed refusal of an application by the CMA, or the impact on insured parties and reinsurers of the cancellation by the CMA of consent for marketing a product.

For more on Oman’s insurance law, contact Ardeshir Patel.

Posted by: amj_admin on September 3, 2017 - 9:36 am

AMJ advised Al Ahlia Insurance Company on its maiden IPO, conversion to a joint stock company and listing on Muscat Securities Market (MSM). The IPO raised OMR 7.5 million through the public offering of a 25% stake (25,000,000 shares at a price of 300 baisas per share) open to individual and institutional investors. It was subscribed by 2.43 times, indicating strong demand from both the investing public and institutional investors to the first share offer on the Muscat bourse in 2017.

This was also the first IPO by an insurance company ahead of the statutory deadline for insurers in Oman to increase their capital to OMR 10 million and list on the Muscat Securities Market.

AMJ’s corporate/capital markets team assisted Al Ahlia in securing key consents and approvals for the IPO from a range of regulatory bodies and with the drafting of the prospectus to ensure all stakeholders’ requirements were satisfied. In particular, AMJ assisted in obtaining CMA approval for the offer of 25% of Al Ahlia’s issued and paid-up share capital to public subscription by way of exemption from Article 61 of Oman’s Commercial Company’s Law (CCL) which provides for a minimum 40% share offer. The CMA also permitted Royal & Sun Alliance (Middle East) B.S.C as a strategic investor to hold a 52.50% majority stake in the new entity as an exception to the CCL which restricts to 20% the shares of a promoter in a public joint stock company.

The AMJ team comprised senior partner, Mansoor Malik, corporate/capital markets partner Ardeshir Patel, senior associate Nasar Ahmad and associate Armughan Ashfaq.

Posted by: amj_admin on June 12, 2017 - 7:15 pm

In April, Oman’s Capital Market Authority (CMA) issued a new regulation for insurance and reinsurance brokers. The new rules contain more stringent capital and guarantee requirements, major changes to the insurance brokerage licensing regime and restrictions designed to prevent conflicts of interest.

Under the new rules the current single brokerage licence which covered both insurance and reinsurance brokerage will be replaced by three separate licences for (i) re-insurance brokerage, (ii) insurance brokerage, and (iii) dual brokerage. Applications for the new licences are likely to entail brokerage firms amending their commercial activities as registered with the Ministry of Commerce and Industry.

The most significant impact of the new rules for many brokerages will lie in the introduction of a minimum capital of OMR100,000. This represents a five-fold increase for many Omani brokerages currently registered with a capital of OMR20,000 under the Commercial Companies Law. Thresholds for the bank guarantees required to be deposited with the CMA as part of the licensing process have also been raised from OMR50,000 to OMR75,000 for insurance brokers, OMR150,000 for reinsurance brokers and OMR 200,000 for dual brokers.

The new rules also ban the ‘founders’ of brokerage companies from concurrently working for insurance companies, other brokers or agents in Oman. The percentage of shares a broker may hold in an insurance company has also been reduced from 10% to 5%. The combined effect of these restrictions is to lessen the risk of conflicts of interest arising between the insurance and insurance/reinsurance brokerage markets and to curtail the scope for interference by brokers in the conduct of insurance business. Another restriction is the ban on brokers from receiving or claiming any interest generated by the sums deposited in brokerage bank accounts (i.e. the accounts in which brokers keep client monies), from using these funds to obtain credit facilities or as security for bank loans.

The regulation is likely to have a significant impact on the brokerage industry in Oman. The robust approach taken signals the regulator’s determination to raise standards and adopt best international practice across all segments of the financial services sector in Oman.

Posted by: amj_admin on June 12, 2017 - 3:57 pm

AMJ has advised the Government of Oman and the issuer, Oman Sovereign Sukuk Company, on the Omani law aspects of establishing an unlimited sukuk alijarah trust certificate issuance programme, and the debut US$2bn international sukuk issuance under the Programme. The Programme was listed on the Irish Stock Exchange in mid-May and followed by the US$2bn sovereign issuance which settled on June 1.

The sukuk facility, which has a seven-year tenor and profit rate of 4.397 percent, was effected under Rule 144A and Regulation S and listed on the Irish Stock Exchange.

The final order book was reportedly in excess of US$6.9 billion, more than three times the issue size, which demonstrates strong international demand for Oman’s high-yielding debt despite the country’s recent credit downgrade by Standard and Poor.

The transaction marks a number of firsts; the Programme is the first of its kind established by the Government; the sukuk issuance is Oman’s largest-ever; and the Sovereign’s first public offer of sukuk in the international market. The issuance marks Oman’s second foray into the international debt capital markets this year following a US$5 billion multi-tranche conventional bond sale in March upon which AMJ also advised. The funds raised by the two issuances are expected to meet a significant portion of the Sultanate’s requirements for 2017.

Mansoor Malik, managing partner, supported by senior Islamic Finance associate Asad Qayyum acted as Oman counsel to the Government and the issuer. Clifford Chance acted as international counsel. Alizz Islamic Bank, Citi, Dubai Islamic Bank, Gulf International Bank, HSBC, JP Morgan and Standard Chartered Bank were the sukuk book-runners.

In mid-2016, AMJ acted as sole counsel to the government on the Sultanate’s first international US$500 million sukuk issuance, which was privately placed. In two earlier ‘first of a kind’ transactions, AMJ advised the issue manager and joint lead managers on Oman’s debut US$648 million sovereign sukuk in 2015 and on Oman’s first-ever corporate issuance in 2013.