Oman Prices Third Bond Sale Since October to Plug Deficit

Oman returned to the debt market for the third time in less than three months, taking advantage of investors’ appetite for yield to help plug the Gulf Arab region’s widest budget deficit, Bloomberg News reported. The largest oil exporter outside of OPEC sold $3.25 billion in a three-part debt offering. Oman priced $1.75 billion in 10-year notes at a yield of 6.25%. It sold another $1 billion in 30-year securities at 7.25%, versus guidance of 7.5% and initial price talk of between 7.625% and 7.75%. It also tapped $500 million of its 2025 bond at 4.45%; earlier guidance was for 4.625%-4.75%, and the initial price talk was 4.875%. Oman may need to borrow about $4.2 billion this year to cover a fiscal shortfall that has swelled after lower oil prices and the coronavirus pandemic battered the finances of one of the Gulf’s weakest sovereigns. The sultanate is trying to win over investors concerned about its dwindling reserves by reducing spending and introducing a 5% value-added tax this year. It also established a new government-owned energy company last year, with plans to use its largest oil block to raise debt. Read more.