DUBAI (Reuters) – Oman has raised $ 2.2 billion with a loan, more than double the amount it originally requested, in a deal that has attracted the interest of a large group of lenders regional and international, four sources said.
The Gulf state, rated under investment grade by all major rating agencies, was in talks for a loan of at least $ 1 billion, sources told Reuters in November. In January, sources said he was looking to raise a $ 1.1 billion loan that could go up to $ 2 billion depending on market appetite.
All four sources said on Wednesday that the deal was reached at $ 2.2 billion last week. Oman’s finance ministry did not respond to a request for comment.
Oman bonds surged after Reuters announced the deal had been struck. Its bonds due 2048 gained 1 cent to trade at 99.1 cents on the dollar, according to Tradeweb data from Refinitiv. This compares to a hike of just 0.09 cents for bonds maturing in 2047 from Bahrain, the only other Gulf ruler classified as “junk.”
Oman expects a budget deficit of 2.24 billion Omani rials in 2021 ($ 5.82 billion). To fill the gap, the government aims to raise around 1.6 billion rials through loans and draw 600 million rials from its reserves.
It was the first Gulf government to tap international bond markets this year, raising $ 3.25 billion in three-part bonds in January, taking advantage of positive market conditions to replenish squeezed state coffers. by the coronavirus crisis.
The new loan has a maturity of 15 months with the option of extending it for an additional 12 months at the borrower’s discretion, sources said.
The all-inclusive price of the loan, including fees, was between 375 and 390 basis points above LIBOR, two of the sources said.
It has attracted the interest of more than a dozen international and regional lenders, who have offered around $ 3 billion for the operation, one of the sources said.
Oman’s external debt maturing this year and next stands at $ 10.7 billion, or about 7.5% of gross domestic product, S&P Global Ratings said.
($ 1 = 0.3850 Omani rials)
Reporting by Davide Barbuscia and Yousef Saba; additional reports from Saeed Azhar; Editing by Louise Heavens, Andrew Heavens and Peter Graff