Muscat, 8th October, 2015 (WAM) – The subscription for the first sovereign sukuk in the Sultanate began today. The subscription will be available to large investors with a minimum of RO500,000 and ends on October 22nd, 2015, Oman News Agency, ONA,reported today.

The Ministry of Finance said that the sovereign sukuk will have a tenor of five years ending in 2020, with their profit rate set through an auction, and the size of the issue will be decided on completion of the process of registration of prospective subscribers.

Moody’s Investors Service was assigned to classify the issue which is fully backed by the Government of the Sultanate. The company is expected to give a preliminary classification of the issue at A1 ((P in line with the Sultanate’s credit rating.

The first issuance of sovereign sukuk comes after a study carried out by the government of the Islamic banking sector in the country which showed the need of financial institutions, Islamic counters, and Takaful companies to financial instruments that are compatible with the Islamic Sharia in order to invest the surplus money. The first issuance of sovereign Sukuk is an important step in order to achieve this goal and to support Government aspiration to develop capital markets in the Sultanate.

It is expected that demand for sovereign instruments will witness a large turnout by individuals and institutions for being the first sukuk to be put of this kind in the Sultanate, stressing the economic and investment importance of the issuance of such sukuk as there are many and varied investment windows in front of everyone.