Omantel’s inaugural venture into the international sukuk market came in the form of a $500 million, seven-year paper that broke new ground in Islamic finance structuring.
Instead of pledging fixed assets, the telecommunications company anchored the sukuk on the flow of fixed-line and mobile data services – quantified in gigabytes – yet still achieved a 100% tangible ratio, satisfying Shariah requirements under AAOIFI standards.
The innovation let the Omani telecom operator access capital without encumbering physical infrastructure while signalling the asset-light possibilities for other Gulf government-related entities.
Timing proved equally astute. After volatile conditions thwarted marketing efforts in 2023, Omantel waited for a window of optimism and re-mandated banks on January 16, 2024.
Investor appetite materialised quickly: initial price talk of 5.625%-5.750% tightened on a wave of orders, and final pricing landed at 5.375% – a level inside which most peer issuers saw fair value and the tightest yield printed by an Omani GRE in the past five years.
The book peaked above $3.5 billion, more than seven times covered, and drew a broad mix of Asian, European and Middle Eastern accounts.
Standard Chartered, acting as joint lead manager, joint bookrunner and sukuk structuring bank, was instrumental to the deal’s success.
