Oman Arab Bank launches $250 million debut bond deal

Oman Arab Bank launches $250 million debut bond deal

DUBAI: The Arab Bank of Oman was set to raise $ 250m on Thursday in its first attempt at international debt markets with an additional Tier 1 bond issue, a document showed.

The bank launched bonds with a yield of 7.625% after initial price guidance in the low 8% range for AT1 bonds after receiving more than $ 1.1 billion in orders, the document from one of the banks in the deal showed.

AT1 bonds are at the highest end of the bank debt issuance risk spectrum. They are of a permanent nature, but issuers can repay them after a certain period. The bonds of the Arab Bank of Oman will be non-refundable (repayable) for five years.

The deal is the latest in a series of AT1 bond issues from the oil-rich Gulf this year, as banks take advantage of low interest rates to strengthen their Tier 1 capital as the region’s economies were hit by the double whammy of COVID-19 pandemic and last year’s historic slide in oil prices.

Emirates NBD Capital, First Abu Dhabi Bank, Kamco Invest, Standard Chartered Bank and Ubhar Capital have arranged the deal.

The Arab Bank of Oman issued AT1 bonds denominated in Omani Rial in 2016 and 2018.

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