DUBAI, Oct 21 (Reuters) - Oman sold $2 billion on Wednesday
in its first international bond sale since July 2019 in a
two-part debt offer as the small Gulf oil producer seeks to fill
state coffers squeezed by low oil prices and the coronavirus
Rated below investment grade by all major credit ratings
agencies, Oman has piled on debt over the past few years and
faces a yawning fiscal deficit of 10% this year, according to an
International Monetary Fund forecast.
It sold $1.25 billion in seven-year bonds at 6.75% and $750
million in 12-year bonds at 7.375%, with orders topping $3.8
billion. It began marketing the seven-year paper at around 7%
and the 12-year around 7.625%, a document from one of the banks
arranging the deal showed.
People familiar with the plans had previously told Reuters
Oman sought to raise between $3 billion and $4 billion in a
However, Oman scrapped a three-year tranche as it faces an
aggressive debt repayment schedule between 2021 and 2023 and
limited investor appetite for the offer, several bankers and
fund managers said.
"Our estimate was that they wanted to do $3 billion. So I
think the size might be a bit disappointing for them but I think
they should be happier with the price," Abdul Kadir Hussain,
head of fixed income asset management at Arqaam Capital.
The country has begun preliminary discussions with some Gulf
countries about financial support, according to a bond
prospectus seen by Reuters. Bahrain, the only other "junk" rated
Gulf country, averted a credit crunch in 2018 when it was bailed
out with a $10 billion aid package from its wealthy Gulf
"If Oman had the kind of explicit Gulf support that Bahrain
has, it may have saved 35 bps in new issuance premium on the
seven-year tranche," a fixed income strategist said.
Bank Muscat , Citi , First Abu Dhabi
Bank, HSBC, Natixis , Societe Generale
and Standard Chartered arranged the deal.
(Reporting by Yousef Saba and Davide Barbuscia;
Editing by William Maclean and Tomasz Janowski)