Categories: Business

Oman Arab Bank launches $250 million debut bond deal

DUBAI (Reuters): Oman Arab Bank was set to raise $250 million on Thursday in its first foray in the international debt markets with an Additional Tier 1 perpetual bond issue, a document showed.

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

AT1 bonds are at the higher end of the risk spectrum of bank debt issues. They are perpetual in nature but issuers can redeem them after a specified period. Oman Arab Bank’s bonds will be non-callable (redeemable) 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 bolster their Tier 1 capital after the region’s economies were hit by the double shock of the 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 are arranged the deal.

Oman Arab Bank issued AT1 bonds denominated in Omani rials in 2016 and 2018.

The Frontier Post

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