Muscat: Bank Muscat, the flagship financial services provider in the Sultanate, has announced plans to raise OMR25 million from Certificates of Deposit (CD) auction to be held on September 19. The CDs will be issued on September 24 to all eligible investors as per the competitive bidding process.
Bank Muscat will be issuing CDs of varying maturing periods to address investors who are looking at medium-term investment options. These will include one-year, two-year and three-year CDs, which will carry coupon rates of 4%,4.25%, and 4.50%. Bank Muscat plans to mobilise a total of OMR125 million from CDs issued over 12 months.
Investors may bid for a minimum of one CD of OMR100,000, and thereafter in multiples of OMR100,000 each. The CDs will carry a fixed coupon rate and the interest will be paid semi-annually. Once allotted, CDs may be transferred among eligible investors as one CD (OMR100,000) or multiple CDs (multiples of OMR100,000). They will be redeemed at par value along with the interest accrued on the date of maturity.
Proceeds from the issue of the CDs will be used for general banking purposes. The issuance of the CDs over one year is expected to provide greater stability to the local financial markets as well as to the Omani economy as a whole. The CDs will also encourage a better savings culture in the Sultanate and provide a reliable and stable medium-term avenue to invest surplus funds.
Applications, bidding and allotment
All institutions, as well as Omani and non-Omani individuals with a bank account in Oman, are eligible to apply for the certificates of deposit. Investors may submit up to three bids at various interest rates during the bidding process on the bid date till the end of banking hours. Applications will be processed and the successful bids will be announced the next working day. Applications will be allotted based on ascending order of interest rates beginning with the lowest yield and up to the point at which the entire CD amount has been subscribed. If there are more bids at the last accepted yield than is available to be allotted, the allotment for such applicants will be made on a pro-rata basis.
Application(s) for CDs may be allotted in full or in part or rejected in full of the total amount applied for, based on bank’s discretion. The bank reserves the right to reject any application which does not fulfil the criteria at the bank’s sole discretion. Allotment notification to successful applicants will be emailed to the email ID provided by the applicant.