Oman’s new Islamic bond draws strong global demand
Muscat’s Sharia-compliant bond sale oversubscribed as credit upgrades boost investor confidence and support active debt management
MUSCAT, Oman (MNTV) — Oman re-entered global capital markets with a one-billion-dollar sovereign sukuk issuance that drew more than four times the amount offered, signaling strong investor confidence following recent credit-rating upgrades.
The instrument carries a 7.5-year maturity, a 4.525 percent annual coupon, and a 60-basis-point spread over U.S. Treasuries.
A sukuk is an Islamic financial instrument similar to a conventional bond but structured in line with Sharia principles, meaning it is backed by tangible assets and avoids interest-based transactions.
Investors earn returns generated by the underlying asset rather than interest payments, making sukuk a preferred financing tool in many Muslim-majority economies.
The Ministry of Finance said the successful issuance reflects Oman’s improving credit position and stronger ability to meet its financial obligations.
Proceeds will support the government’s debt-management strategy, including the buyback of $303 million in Eurobonds maturing in June 2026 and the partial repayment of $697 million linked to an international sukuk due in October 2025.
Officials noted that the transaction aligns with Oman’s medium-term public-debt roadmap, which seeks to reduce servicing costs, lengthen maturities, diversify funding sources, and strengthen fiscal resilience through proactive liability management.
The issuance follows Oman’s recent upgrade to investment-grade status, supported by improved economic indicators, stronger fiscal buffers, and a declining public-debt-to-GDP ratio.
Investor demand was broad, with orders from regional and international institutions surpassing the offer by more than fourfold. Authorities said the strong appetite enabled Oman to refinance upcoming obligations at competitive rates and cut 2026 maturities by 12 percent.
They added that the sukuk contributes to a more diversified debt portfolio, reducing refinancing risks and reinforcing Muscat’s position as a credible issuer in global Islamic finance markets.
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