Al Madina Financial Investment services finalizes details on OMR50 million (US$129.85 million) Sukuk issuance (By IFN)

Al Madina Financial Investment services finalizes details on OMR50 million (US$129.85 million) Sukuk issuance

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OMAN: In what is expected to be the sultanate’s first major drive to facilitate its Islamic capital markets, Al Madina Financial and Investment Services has submitted its prospectus for the issuance of OMR50 million (US$129.85 million) in Sukuk to the country’s regulators, the Capital Market Authority. The deal, which will be privately placed, will require less stringent regulations compared to those imposed on public issuances, the executive president of the Capital Market Authority, Abdullah Salem Al Salmi said. As such, a rating on the papers will not be mandatory. Proceeds from the issuance, which was first announced in early May, will be used to fund the ongoing expansion of the Muscat Grand Mall, which is being developed by Tilal Development Company. The minimum subscription on the issuance is anticipated to start at OMR2 million (US$5.19 million). The Capital Market Authority of Oman is actively encouraging companies to issue Sukuk in an effort to increase activity in the country’s Islamic capital market to create liquidity instruments for its Islamic banks to invest in. The government is said to be in the latter stages of announcing its Sukuk regulations, after the recent finalization of its draft law. Part of the draft regulations include the allowance of a joint stock company or SPV to issue Islamic instruments, as well as a cap on the amount a company is allowed to issue; on par with its net equity value.