March 10 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
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
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
Oman's Islamic banking sector, comprised of two full-fledged
Islamic banks and several Islamic windows, extended 2.4 billion
rials worth of financing last year, up from 1.8 billion rials in
2015, central bank data showed.
A sukuk from Golden Group, which has interests in
construction, real estate, hospitality and logistics, would be
only the third corporate sukuk in Oman.
Last year, conglomerate MB Holding Co issued $76 million
through a privately placed sukuk, while real estate firm Tilal
Development Co sold the country's first sukuk in 2013, a 50
million rials deal.
Earlier this month, the Islamic banking unit of Bank Muscat
received regulatory approval for a 100 million rials
sukuk programme, while the Omani government is also planning to
issue a dollar-denominated sukuk.
($1 = 0.3850 Omani rials)
(Reporting by Bernardo Vizcaino; Editing by Richard Pullin)