Bank Muscat, Oman's largest lender, will sell a $500 million five-year bond on Tuesday in its first dollar debt issue in nine years, with strong demand allowing the deal to launch at among the lowest borrowing costs available to it.
The bond issue is the latest means deployed by the Omani lender to raise funding.
Earlier this year, the company secured a $200 million equity investment from the International Finance Corporation in a private placement. Prior to that, in August, it raised 96.7 million rials ($251.2 million) from an oversubscribed rights issue.
The bond, which is the first dollar-denominated issue from Bank Muscat since 2004, launched at a spread of 170 basis points over five-year midswaps.
Final guidance released earlier in the day had indicated the issue would price between 170 and 180 basis points over midswaps, tighter than the 187.5 bps area indicated on Monday.
Order books for the deal totalled more than $2.5 billion before they were closed at 0930 GMT, arranging banks said.
The bond is a rare international debt sale from the Gulf sultanate, but traders said the issuer, rated A- by Standard & Poor's, should be compared with other large Gulf banks in which the state holds a significant stake.
The government owns a 25 percent stake in Bank Muscat, which expects its credit growth to be around 14 to 15 percent this year, driven by high government spending and higher wages for local citizens.
The bank said proceeds of the bond would be used for general financing purposes and gave no further detail.
Citigroup, Credit Agricole, Deutsche Bank , HSBC, National Bank of Abu Dhabi and Standard Chartered are arranging the sale, which will fall under the lender's $800 million EMTN programme.