Oman Electricity Transmission Co (OETC), a government-owned entity, is considering whether to issue U.S. dollar-denominated Islamic bonds, sources familiar with the matter have revealed.
The potential fund-raising would contribute to a $2 billion capital expenditure programme run by its parent company, Electricity Holding Co (EHC), which aims to revamp the country’s electricity distribution network, reported Reuters.
OETC has issued conventional international bonds in the past, including $1 billion of 10-year notes in 2015 and $500 million of 10-year bonds last May. Both transactions were managed by Bank Muscat and JP Morgan.
The upcoming deal would be the first international sukuk issued by the Omani company.
Bank Muscat and JP Morgan, together with First Abu Dhabi Bank and Kuwait Finance House, are expected to arrange the sukuk, said the sources.
An executive at EHC said the company was not in a position to comment about the sukuk plans at this stage.
OETC’s financing would be the latest in a series of debt transactions – including OETC’s bond in May – which EHC is executing as part of its capital expenditure programme for 2017 and 2018.
Two additional subsidiaries of the Omani holding company, Majan Electricity Co and Muscat Electricity Distribution Co, are in the process of raising syndicated loans of $165 million and around $200 million, sources told Reuters last week.
The Omani government – rated Baa2 by Moody’s, BBB by Fitch and BB+ by Standard & Poor’s – has raised in excess of $10 billion in debt this year through a combination of conventional bonds, sukuk and loans, as the Gulf state taps the international debt markets to support its finances, which have been hit hard by low oil prices.