Oman has reportedly raised $2.2 billion worth loan in a deal that has attracted the interest of a large group of regional and foreign lenders.
According to reliable sources, the Gulf state, rated sub-investment grade by all major credit rating agencies, had been negotiating with a consortium of banks to generate a $1.1 billion loan, which could have went up to $2 billion depending on market demand.
The new loan has a 15-month maturity with the option to extend it by another 12 months at the borrower’s discretion, according to the sources. It has attracted interest from more than a dozen foreign and regional lenders, which offered around $3 billion for the deal.
The deal was eventually completed at $2.2 billion last week, the sources added. Oman’s ministry of finance did not immediately respond to a request for comment.
The Sultanate expects a 2021 budget deficit of $5.82 billion (2.24 billion Omani rials). To make up the shortfall, the government intends to raise about $4.16 billion (1.6 billion rials) through borrowing and draw $1.5 billion (600 million rials) from its reserves.
As per the reports, it was the first Gulf government to tap the international bond markets this year, raising $3.25 billion in three-part bonds in January, taking advantage of positive market conditions to replenish state coffers battered by the coronavirus crisis.
According to the previous report of global data provider Refinitiv, the Sultanate has $1.5 billion in international bonds due in June, last year, in addition to the $1 billion loans due in January, which it took out in 2016 after oil prices plummeted.
American credit rating agency, S&P Global Ratings has stated that Oman’s external debt maturing this and next year totals $10.7 billion, or around 7.5 percent of GDP.