Oman

With four big loan deals already in the market for Omani borrowers this year and more expected, bankers are concerned that lenders could fast run up against country limits. With a big hole to plug in Oman's budget, spillover to the bond market looks inevitable, writes Bianca Boorer.

Oman’s sovereign wealth fund is in the market for a $600m loan to support its acquisition of a stake in Oman Telecommunications, and is tapping Asian liquidity for the first time. With several Gulf nations making efforts to contain budget deficits, including by selling assets, borrowers from the region could be ones to watch. Shruti Chaturvedi reports.

The sovereign wealth fund of Oman is seeking to establish relationships with regional banks in Asia through a $600m syndicated loan to fund its acquisition of a stake in Oman Telecommunications.

If “keeping one’s cards close to one’s chest” in negotiations while also acknowledging the need for market certainty seems like a peculiarly Brexit paradox, try managing the funding plans of a Gulf state as it tries to deal with a budget deficit.

The Gulf Cooperation Council (GCC) region looks set to provide a hotbed of loans market activity in the first half of 2017, with bankers sizing up a strong pipeline out of Oman as the sultanate looks to address a budget deficit.

Oman Oil and Bank Muscat are set to kick off a rash of loans in the sultanate in the coming months, with a number of state owned entities in discussion with lenders as the government looks to address a budget deficit.

Bank Muscat is preparing to refinance a $600m loan maturing in April next year and will likely aim to raise the same amount with its new facility, said one banker.

Several loans from Omani credits are being tipped to be launched this year, but, after several large deals, some bankers have concerns that lending appetite is waning.

Rating: Baa1/BBB-

Oman locked down $1.5bn this week, pricing “wisely” with a decent new issue premium and kicking off a busy few weeks of issuance from the Gulf Corporation Council’s oil rich, but cash poor, sovereigns as Bahrain and Saudi Arabia ready trades.

Oman left a chunky new issue premium on the table with its latest $1.5bn bond sale, but with competing supply looming, and a market backdrop that included two pulled trades, EM bankers said it was a prudent move that resulted in a great trade and over $4bn of orders.

The Middle East bond floodgates have finally opened but with Bahrain hitting the road this week and Saudi Arabia's deal looming, supply concerns have prompted Oman to reopen its dual tranche tap at “eye-wateringly wide” levels.