OETC raises $500m from international markets

Muscat: Following a successful road show, which covered core fixed income investors in the United States and the United Kingdom, the Oman Electricity Transmission Company (OETC) announced it has raised a $500 million from the international bond market recently.
The bonds are listed on the Irish Stock Exchange and the issuance was managed by OETC and Nama Holding, along with J P Morgan and Bank Muscat; acting as joint bookrunners.
The bonds, which will expire in 2027, are a 10-year Reg S / 144A bond issued at a fixed interest rate of 5.196 per cent. The issuance is rated Baa1 (stable) by Moody’s and BBB (stable) by Fitch.
Given the strong indications of interest received from the market after the initial price thoughts at mid-swap plus 300 bps (basis points), the bond received an oversubscription of eight times, and therefore, the pricing was tightened by 15 bps to Mid-swaps + 285 bps.
At the issuance stage, it was oversubscribed by 6.5 times, with an order book of 326 accounts, reflecting a positive market perception for OETC’s credit and the Government of the Sultanate of Oman.
“We are delighted with this achievement and the strong interest from the international markets, which reflects investor confidence in OETC, the sector and the Sultanate,” said Ali Al Hadabi, chief executive officer of OETC.
The final order book comprised of 31 per cent Asian investors, 24 per cent European investors, 16 per cent British investors, 14 per cent American investors and 14 per cent from the Middle East and North Africa (MENA) region.
The composition of investors was 46 per cent fund managers and 49 per cent private and public banks, while insurance funds, pension funds and agencies accounted for the remaining balance of 5 per cent.
In 2015, OETC received an award from the Middle East Award for Bonds, Loan and Sukuk in two categories: ‘Winner: Sovereign /quasi-sovereign financing deal of the Year,’ as well as ‘Runner-up: Investment Grade Bond/Sukuk Deal of the year.’