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Muscat – Oman raised $ 3 billion in its first access to global debt markets this year after receiving strong demand from global investors looking for high returns in a low-yield environment.
Investors deposited bonds for $ 14 billion, yielding 4.95% for more than five years maturing in February 2025 and 6% for the 10-year tranche.
According to a document issued by one of the banks in charge of the process, this price is lower than the original target price of about 5.375 and 6.375% announced Thursday.
A separate document stated that Oman had issued bonds with a term of five and a half years worth $ 750 million and $ 2.25 billion bonds out of ten years.
Sources said earlier that the bonds would likely rise to $ 2 billion and the proceeds from their sale would cover part of the country's budget deficit of $ 7.3 billion this year.
Oman's public finances have been hit by falling oil prices over the last four years and the government is working to reduce the growing fiscal deficit through diversification of the economy, which is still very slow.
The sale of bonds is seen as a test of Oman's ability to track foreign debt markets after the three major credit rating agencies degraded the country at high risk and presented itself under favorable in emerging markets.
"The low-yield environment is a favorable feature," said Sergei Derjachev, chief debt officer for emerging-market companies at Union Investment, quoted by Reuters.
"We have a growing number of negative yielding securities and attractive yield levels such that Oman should receive a payment," he said.
The initial target price puts the new issue at a premium of about 30 basis points above the existing Omani debt curve, Derjashiv said.
Citi, JP Morgan and Standard Chartered were authorized to coordinate the transaction. The three banks also manage the books with Abu Dhabi First Bank, Mitsubishi UFG, Natixis and Societe Generale.
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