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Trowers & Hamlins advises on Sultanate of Oman’s first Sukuk Programme by Meethaq Islamic Banking

Trowers & Hamlins advises on Sultanate of Oman’s first Sukuk Programme by Meethaq Islamic Banking

This is the first Sukuk Programme and also the first retail Sukuk to be issued in the Sultanate of Oman and a landmark transaction that marks Meethaq’s debut in the Sukuk market.

Trowers & Hamlins advised as transaction counsel on establishment of the OMR 100,000,000  (USD 260,080,000) Al Musharaka Certificate Issuance Programme (Programme) by Meethaq Islamic Banking, bank muscat S.A.O.G. (Meethaq) and on the successful completion of Series 1, issued by Meethaq Sukuk Company LLC, an Oman limited liability company, under the Programme by way of public offering of 44,608,300 certificates (including 19,608,300 certificates issued pursuant to partially exercised over-allotment/greenshoe option following very high demand for the Series 1 certificates) at a public offering price of OMR 1 per certificate, resulting in gross proceeds to Meethaq of OMR44,608,300 (excluding offer expenses of baisa 2 per certificate). OMR 1 is divided into 1000 baisa.

The certificates were admitted to trading by the Muscat Securities Market on the Bonds and Sukuk Market on 13 June 2017.  The public offer closed 1 June 2017.

Series 1 will mature on 13 June 2022 and carries a profit rate of 5% per annum.

Al Madina Investment Co. S.A.O.G. acted as the issue manager to Series 1.

This is the first capital markets transaction in Oman to utilise an Oman limited liability company as issuer and trustee. Series 1 is the first public offer of Sukuk in Oman.

Trowers has an extensive history of advising a wide range of clients (including the Government of Oman on its debut Sukuk issuance) on capital markets transactions including Sukuk issues in Oman. The firm also acted on the first ever Sukuk issuance in Oman by Tilal Development Company in 2013.

Salman Ahmed – head of Islamic Finance at Trowers & Hamlins (MENA) commented:

“This is a landmark transaction for Oman and Meethaq which received a very strong uptake from a wide range of investors. We are naturally very pleased to be a part of this significant transaction by our long standing client, Meethaq. We are extremely grateful to the Meethaq team and remain indebted to the CMA and the CBO for their extensive support and guidance throughout this transaction. This transaction is very important for paving the way for further Sukuk issuances particularly, programmes and retail issuances, in Oman as it fully utilises a number of new options that were introduced by the Sukuk Regulation of 2016 to facilitate Sukuk issuance in Oman by the CMA such as flexibility to establish programmes (which operate in the same manner as EMTN programmes), the new financial trust provisions and the use of LLCs to issue Sukuk. This transaction reinforces Oman’s commitment to the progression of the Islamic finance industry particularly, facilitating the development of an active Sukuk market. The exercise of the over-allotment/greenshoe option signifies substantial appetite for Sukuk in Oman.”

The Trowers & Hamlins team was led by partners Salman Ahmed (London/Bahrain), Elias Moubarak (Dubai), Jamie Gibson (Oman), assisted by Riza Ismail (senior associate, Oman), Niall McMorrow (senior associate, Bahrain), Brian Kelleher (senior associate, Bahrain), Aisha Al-Bualy (associate, Oman) and Shah Malik (associate, London/Bahrain).