The Central Bank of Oman (CBO) recently announced the new issue of Government Development Bonds (GDB) on behalf of the Sultanate of Oman’s Ministry of Finance. The new issue is set at OMR100 million with the option to exceed this amount with the Greenshoe option. The bonds have a maturity period of 5 years and will carry a coupon rate of 5.1% per annum.
Investors interested in purchasing the bonds can do so during the subscription period, which runs from 1 July to 11 July 2024. The auction for the bonds will be held on Sunday, 14 July 2024, with the issue date set for Tuesday, 16 July 2024. Interest on the bonds will be paid semiannually on 16 January and 16 July each year until the maturity date on 16 July 2029.
It is important to note that the 71st GDB issue is open to all investors, both residents and non-residents, regardless of nationality. Investors must apply for the bonds through the competitive bidding process and can submit bids through commercial licensed banks in Oman during the subscription period. Investors with bids of RO 1 million or above have the option to submit their bids directly to CBO, after getting them endorsed by their banks.
These GDBs are considered direct and unconditional obligations of the Government of Sultanate of Oman, represented by the Ministry of Finance. This means that the bonds can be used as collateral to obtain loans from local commercial licensed banks and can be traded at prevailing market rates through the Muscat Stock Exchange (MSX). The details of the bonds allotted will be recorded in the register maintained by the Muscat Clearing and Depositary Company (MCD).
Overall, the new issue of Government Development Bonds presents a unique investment opportunity for both residents and non-residents in Oman. With a generous coupon rate and the ability to use the bonds as collateral, investors may find these GDBs to be a valuable addition to their investment portfolios. Interested investors should take note of the subscription period and auction date to ensure they do not miss out on this opportunity to invest in the development of the Sultanate of Oman.
