Mazoon Electricity raises $500m from debut sukuk issue

Muscat: Mazoon Electricity Company successfully priced its debut $500 million 10-year Sukuk offering. The Sharia-compliant Ijara structure was adopted for issue of the Sukuk Certificates and the profit rate was set 5.20 per cent.
Robust investor demand translated into a final order book of $5 billion from 300 orders, representing more than 10 times oversubscription. The final order book distribution by geography comprised of 47 per cent from the Mena region, 17 per cent Asian investors, 23 per cent from European investors and 13 per cent from US investors. The composition of the investors by investor type was banks and private banks (52 per cent) and asset managers (46 per cent).
The certificates will be listed on the Irish Stock Exchange and the issuance was managed by Mazoon and Nama Holding along with JP Morgan Securities, Bank Muscat, KFH Capital Investment Company KSCC and First Abu Dhabi Bank PJSC acting as Joint Lead Managers and Noor Bank PJSC and Warba Bank acting as co- managers.
“Since 2014, the Group’s financing programme – Lamar project has so far achieved financing OMR1.407 billion up to date. The fundraising programme will support the group’s electricity transmission and distribution networks investmentsm,” said Hassan bin Mohammed Al Lawati, chairman of Nama Group.
This landmark transaction marks the first international corporate Sukuk issue out of the Sultanate. The issuance is rated Baa2 (Negative) by Moody’s and BBB (Negative) by Fitch, said a press release.
A comprehensive global roadshow was conducted in Asia, UAE, London, Boston and New York. With this marketing effort, Mazoon was able to build strong momentum and price the 10-year Sukuk offering via an intra-day execution process. “We attribute the success of the Sukuk certificate issue primarily to the prevailing Transparent, Robust and successful regulatory mechanism, support of the Government and consistent growth of the company,” said the Chief Executive Officer Eng. Zahir Abdulla Al Abri.
“It was a remarkable success of Mazoon Electricity Company’s debut Sukuk issuance. Robust demand from international and Islamic investors prompted Mazoon to tighten pricing from price guidance to reach the profit rate of 5.20 per cent,” said Hussain Abdullatif Al Balushi, Group Chief Financial Officer of the Nama Group.