Bank Sohar closes RO100mn bond issue

Bank Sohar

Bank Sohar successfully closed the issue of up to 100,000 perpetual capital securities (including a greenshoe option) on a private placement basis, at a price of OMR1,000 per capital security, aggregating to RO100mn.

The capital securities was issued with an initial interest rate of 7.75 per cent. The results of the private placement were approved by the Capital Market Authority (CMA).

According to an official statement by the bank, CMA allotted the capital securities to successful subscribers in line with the terms and conditions of its prospectus. Post CMA approval, the capital securities were listed on the Muscat Securities Market (MSM).

“Bank Sohar has successfully closed the issue last month as planned. The over-subscribed issue further strengthens our capital base and credit rating offering an initial coupon of 7.75 per cent, which compares well with the perpetual bonds issued by other banks in Oman,” said, Sasi Kumar, acting chief executive officer of Bank Sohar.

“The reset of coupon rate after 5 years provides potential return protection to investors, if interest rates rise. A perpetual bond is a good investment opportunity as the banking sector in Oman is well regulated and has been resilient to systemic risks in the international banking sector. Also, reputed and quasi-government principal shareholders are expected to support the Bank at all times,” he added.

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