islamic finance

Issuance of Oman’s first Perpetual Sukuk completed

February 25, 2021

Sohar Islamic — Sohar International’s Islamic Window — has successfully completed the issuance of RO 6 million Perpetual Sukuk al Mudaraba Trust Certificate by Takaful Oman Insurance SAOG, a leading Takaful company in Oman. The Perpetual Sukuk has an initial yearly profit rate of 8.5 per cent, payable semiannually through Takaful Sukuk Specialized Purpose Company (SPC) established by Takaful Oman for this specific programme.
As the issue managers and financial adviser, Sohar Islamic played a pivotal role in ensuring the successful issuance and completion of the entire activity.
The placement of the issue was done through a private placement to select investors whilst receiving a strong interest from institutions, fund managers, and wealth management clients of the bank.
The transaction represents a first-of-its-kind perpetual Sukuk programme established by a takaful company. Unfamiliarity with Mudaraba structures in the Oman Sukuk market and the way the deferment of profit payments is structured under the programme added significant complexity to the transaction.
Together with the support of Capital Market Authority (CMA) and Trowers & Hamlins as legal advisers, the issue was initiated and completed with immense success on all fronts. This transaction will boost CMA’s strategy to upgrade various sectors and maximise domestic and foreign investors’ confidence in the local market.
The net proceeds of the Certificates shall be used by Takaful Oman to strengthen the quality of its capital and for general corporate purposes. The securities are listed and admitted to trading on the Muscat Securities Market (MSM).


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