MUSCAT: Oman’s central bank plans to issue a four-year development bond worth 100 million rials ($260 million) at an interest rate of 3.25 percent per year, it said on Tuesday.
The subscription period for the bond will be from Oct. 24 to Nov. 4 and the auction will be held on Nov. 8, the bank said in a statement.
Interest will be paid every six months. The bonds are available to all international as well as local investors and will be traded on the Omani bourse.
"It’s not clear whether the procedure is earmarked for individual projects or whether it feeds into the capital budget," said Paul Gamble, head of research at Saudi bank Jadwa Investment."This is for human as well as physical development, building schools, health care facilities, and roads."
Oman is planning to spend around $3.5 billion in the next five years to increase oil output and generate cash for infrastructure projects.
The global financial crisis slashed growth rates and froze credit in the world’s top oil exporting region last year, forcing governments to embark on massive fiscal spending.
In July, Oman issued a five-year $260 million government development bond with a 4 percent coupon, and an average yield of 2.37 percent.
Oman is expected to post 4.3 percent economic growth and a fiscal surplus of 4.0 percent of gross domestic product this year, a Reuters’ poll showed in Sept., thanks to a recovery in oil prices.
