Oman back to debt markets with $3.25bn multi-tranche bond

DUBAI: Oman sold $3.25 billion in three-part bonds on Thursday, documents showed, as the debt-burdened Gulf oil producer seeks fresh funding to cover a large fiscal shortfall.

Oman issued $1.75 billion 10-year bonds, $1 billion 30-year notes, and $500 million through the reopening, or "tap," of $750 million in outstanding bonds due in 2025, according to investor notes reviewed by Reuters.

Oman, rated below investment grade by all major credit ratings agencies, has piled up debt at breakneck speed over the past few years to offset a decline in oil prices and cover widening deficits.

The 10-year paper was sold at 6.25% and the 30-year at 7.25%, while the 2025 bond tap offered a 4.45% rate.

Citi, HSBC, JPMorgan and Standard Chartered were mandated to coordinate the deal.

Oman is also raising funds in the bank market, sources told Reuters earlier this week, as it works with a group of banks to raise a $1.1 billion facility which could go up to $2 billion in size depending on market appetite.

Oman's external debt maturing this and next year amounts to $10.7 billion, or about 7.5% of gross domestic product, S&P Global Ratings has said.

It expects a 2021 budget deficit of 2.24 billion rials ($5.83 billion) this year and to make up the shortfall the government aims to raise about 1.6 billion through borrowing and draw 600 million from its reserves.