AMJ has advised the joint lead managers (JLMs) as Oman Counsel on the update of National Bank of Oman’s (NBO) US$1.5 billion Euro Medium Term Note programme (Programme) and the issue of US$500 million 5.625% notes due 25 September 2023 thereunder.

The JLMs comprised Arab Banking Corporation (B.S.C.), Citigroup Global Markets Limited, Crédit Agricole Corporate and Investment Bank, Emirates NBD Bank PJSC, First Abu Dhabi Bank PJSC, NBO and Standard Chartered Bank.

The Bank simultaneously undertook a liability management exercise, the first of its kind in Oman, to buy back US$300 million face value of notes out of its existing USD 600 million five-year notes maturing in October 2019. The new issue of USD 500 million, which was oversubscribed by more than two times, was priced at 5y Mid-swap plus 270 basis points. The Programme and issue are rated (Baa3, Moody’s) and listed on Euronext Dublin (formerly the Irish Stock Exchange).

AMJ’s team was led by senior partner Mansoor Malik supported by senior associate Asad Qayyum.

Developing a robust debt capital market to sustain long-term economic growth has been high on Oman’s policy agenda for some years. This policy is beginning to pay dividends with the value of the bonds and sukuk segment of the Muscat Securities Market (MSM) growing by 32% to OMR2.63 billion during the period 2016 to 2017. This represents about 15% of the MSM’s total market capitalisation and an average annual increase of 46% over the last five years.

In a keynote address to the Oman Debt Capital Market Conference held in Muscat on April 18, the head of Oman’s Capital Market Authority (CMA), Sheikh Abdullah Al Salmi, attributed the strong growth to CMA measures to promote debt capital market instruments as an alternative funding mechanism for both government and private sector in addition to stimulating FDI. CMA measures include focusing on key areas of market infrastructure, regulation and product innovation in both the conventional and Islamic segments.

The day-long conference organised by the Gulf Bond and Sukuk Association (GBSA) in partnership with Al Busaidy Mansoor Jamal & Co (AMJ), and Maisarah, Bank Dhofar’s Islamic banking window, assembled industry players, legal experts and stakeholders to discuss the development of both conventional and Islamic debt markets. A panel moderated by AMJ’s Islamic finance specialist, Asad Qayyum, identified the introduction of more diverse and complex instruments and structured products as a key factor to driving development and promoting financial stability.

As at June 2018, the value of bonds and sukuks on the MSM has risen to OMR2.85 billion.

AMJ has advised the government on Omani law aspects of the country’s largest debt capital markets issue to date. The US$5 billion offering in tranches of five, 10 and 30 years was settled on 8 March 2017. The five-year tranche totalled US$1 billion, while the 10- and 30-year tranches raised US$2 billion each. The bonds were offered and sold in reliance on Rule 144A and Regulation S and were admitted to trading on the Irish Stock Exchange.

Order books for the issue which marks the Sultanate’s return to the international debt capital markets after an absence of two decades, reportedly totalled $20 billion, demonstrating strong international demand for Oman’s high-yielding debt.Most long term bonds were taken up by US investors in the United States thereby reducing the impact of Oman’s bond on liquidity within the region while the five year tranche was more in demand with Gulf based investors. The proceeds from the bond sale represent almost the entirety of Oman’s foreign borrowing requirement for 2017 which the government intends to use to cover around two thirds of the country’s expected budget deficit of US$ 7.8 million. The remainder will be covered from state reserves and domestic borrowing.

Mansoor Malik, managing partner, led AMJ’s team supported by senior associate Asad Qayyum. Clifford Chance acted as International Counsel to the government. Bank Muscat, Citi, Deutsche Bank, HSBC, ICBC Standard, JP Morgan, Société Générale, and Standard Chartered Bank were joint-lead managers for the bond.

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.