First Islamic Sukuk in Oman Issued

Sultanate of Oman – the last GCC country to allow Islamic finance and banking – has successfully celebrated the issuance of the first Sukuk by the private sector – Tilal Development Company SAOC (TDC), worth OMR50 million (130 million USD) Sukuk Al Ijarah.

Al Madina organised a launching event in Muscat, witnessed by the Executive President of the Capital Market Authority (CMA), H.E. Sheikh Abdullah Salim Al Salmi, to announce the successful Sukuk issue for the first time ever in Oman.

Al Madina acted as the Principal Advisor, Joint Lead Arranger and Joint Lead Manager for the Sukuk Al Ijarah on behalf of TDC. The proceeds from the sukuk will be utilized for the expansion of TDC’s flagship project – the Tilal Complex, which encompasses the largest mall in the Sultanate, Muscat Grand Mall.

The Executive President of the Capital Market Authority said: “The issuance of these Sukuk will definitely contribute to the national economy, where it will act as a new resource to finance various projects. It is the crown jewel of the collective efforts of the private and public sector organizations.”

His Excellency Hamood bin Sangour Al-Zadjali, the Executive President of Central Bank of Oman , noted on the occasion: “Issuing of the first ever Islamic Sukuk by the private sector is such a huge and important milestone in the history of the Omani economy. We hope to see more expansion into Islamic Sukuk financing. As for the future possibility of the use of Sukuk by the government, a bilateral committee has been formed by the Ministry of Finance and the Capital Market Authority, and it is studying the issuance of government Islamic Sukuk in Omani Riyals, and I hope that will attract further investment in the economy for the future.”

Khamis Al Kiyumi, Vice Chairman and Managing Director of Al Madina, noted in his remarks “The issuance of this Sukuk will spur a new wave of growth in the Islamic finance industry in the Sultanate, centered mainly on the Islamic Capital Market. Al Madina has been always a believer on shariah compliant offerings and this Sukuk issuance has positioned us as one of the foremost institutions in the Islamic finance arena in Oman”.

Abdul Rahman Barham, Board Member of TDC added, “We were always optimistic about this innovative transaction. Being the first corporate to issue the Sukuk, we are delighted that we managed to play a historic role in the Islamic finance sector in Oman. With the successful issuance of the Sukuk, we are in line with our aim for the expansion of Tilal Complex, which will benefit the entire retail market in the Sultanate”.

Abdul Samad Al Maskari, Chief Executive Officer, Al Madina Investment, informed that among the recipients of the awards were Bank Nizwa SAOG for their involvement as Joint Lead Arranger and Joint Lead Manager. Bank Dhofar SAOG, Meethaq Islamic Banking (Bank Muscat) and Qatar International Bank were also appreciated for their role as Joint Lead Manager. Morgan, Lewis & Bockius acted as the lead legal counsel advising Al Madina Investment, supported by Al Busaidy, Mansoor Jamal & Co who advised on the local regulations. Meanwhile, Trowers & Hamlins acted on behalf of TDC and Amanie Advisors provided their services as the Shariah advisor for this issuance.

Rated BBB+ by Capital Intelligence, the Sukuk Al Ijarah issued by Modern Sukuk SAOC on behalf of Tilal Development Company SAOC (TDC) boasts a stable asset of more than 62 OMR million in market value. The Sukuk will pay a five percent profit rate per annum over its five year tenure.

*This article was published on 18 November 2013 by Zawya.com. Read the original article here.

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