Tilal Development Company SAOC plans to raise 53 million rials ($138 million) in the first quarter in Oman’s first corporate Islamic bond sale to fund a mall expansion in the Persian Gulf nation.
The real estate company will use proceeds of the sale to expand the Muscat Grand Mall in the Omani capital, Tilal said in an e-mailed statement. Amanie Advisory House of Oman is advising on the issuance, it said. The sale will be the first for any company in the majority Muslim nation, according to data compiled by Bloomberg.
Companies and government’s in the six-nation Gulf Cooperation Council, which includes Oman and Saudi Arabia, have stepped up sales of debt that comply with Islam’s ban on interest to take advantage of near record-low borrowing costs. Sukuk sales in the GCC have more than tripled this year to $20 billion, data compiled by Bloomberg show.
“We are also glad to be pioneering the sukuk market in Oman and hope that it will grow exponentially” from here, General Manager Hassan Jaboub said in the statement.
Tilal will sell the notes before the end of March and is awaiting regulatory approvals, AbdulRahman Burham, the company’s chief executive officer, said today by phone.
Oman issued licenses in 2011 to allow the first two Islamic banks to start operations, and the sultanate is set to pass legislation this year to allow non-Islamic banks to offer Shariah-compliant products. The Islamic finance industry’s assets worldwide will double by 2015 to as much as $3 trillion, spurred by demand from the GCC and Malaysia, Standard & Poor’s said in September.
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