Energy Development Oman (EDO) S.A.O.C. has triumphantly completed a US$750 million Sukuk issuance, signifying a notable accomplishment for Oman’s national energy sector.
The issuance witnessed robust investor interest, underscoring strong confidence in both EDO and the Sultanate of Oman’s strategic position in the global energy market.
Second Sukuk Issuance in Under a Year Oversubscribed:
This marks EDO’s second Sukuk issuance within a year, with the latest offering being oversubscribed more than fourfold. The issuance garnered over 115 orders from diverse global investors spanning Europe, the UK, the US, the Middle East, and Asia, showcasing the company’s appeal to a wide range of stakeholders.
Favorable Pricing and Lower Cost of Financing:
The Sukuk was priced at a profit rate of 5.662% for a seven-year term. This represents a notable decrease compared to EDO’s previous Sukuk issued in September 2023, which carried a profit rate of 5.875% over a ten-year term. This favorable pricing reflects EDO’s ability to secure financing at a reduced cost, benefiting both the company and Oman.
Positive Investor Sentiment:
Sultan Al Mamari, Chief Financial Officer of EDO, expressed his satisfaction with the results, highlighting the issuance as a significant achievement. He stated, “The overwhelming response from investors underscores their confidence in our strategic direction and financial strength.”
Strong Credit Ratings:
The senior unsecured Sukuk Al Ijara/Murabaha has been assigned a BB+ rating by both Standard & Poor’s and Fitch. Priced with a spread of 1.35% over US Treasuries, these trust certificates will be issued under EDO Sukuk Limited’s trust certificate issuance program.
Leading Financial Institutions Support Issuance:
A consortium of prominent financial institutions, including Abu Dhabi Commercial Bank PJSC, Bank Muscat SAOG, Citigroup Global Markets Limited, Dubai Islamic Bank PJSC, Emirates NBD Bank PJSC, HSBC Bank plc, J.P. Morgan Securities plc, Mashreqbank psc, and Standard Chartered Bank, served as co-lead managers and bookrunners. Their collective expertise facilitated the successful execution of the issuance in international capital markets.
Fueling Oman’s Energy Sector Growth:
The proceeds from the Sukuk issuance will be utilized to support EDO’s ongoing initiatives within Oman’s energy sector. This investment will enhance the company’s capabilities as a fully integrated energy enterprise and contribute to the successful implementation of the country’s comprehensive energy strategy.