Muscat: Energy Development Oman (EDO) has successfully issued a USD 10-year Sukuk worth RO 250 million (USD 650 million), set to mature in January 2036. This initiative is aligned with EDO's ongoing financing strategy, aimed at supporting a portion of its annual capital expenditure needs, diversifying funding sources, and optimizing its capital structure.
According to Oman News Agency, the Sukuk was priced at a profit rate of 5.14%, achieving a credit spread of 100 basis points over the 10-year US Treasury benchmark. This marks the tightest pricing ever secured by an Omani government-related entity. The issuance follows the recent upgrade to investment grade (BBB-) by Fitch, aligning with the rating from S and P, for both EDO and the Sultanate of Oman.
This represents EDO's third US dollar Sukuk issuance, building on previous transactions in 2023 and 2024. The 5.14% profit rate favorably compares to the 5.875% from EDO's debut 10-year Sukuk and the 5.662% for the 7-year issuance in 2024, highlighting a strong pricing outcome amid international market challenges.
EDO acted swiftly in early January, capitalizing on a favorable market window to secure part of its 2026 financing. Citi, J.P. Morgan, and Standard Chartered served as Global Coordinators, with DIB, HSBC, Mashreq, and Sohar International as Joint Bookrunners. The issuance saw strong investor participation from Asia, Europe, the GCC, the UK, and the US.
Through this transaction, EDO extends the average tenor of its debt portfolio while further optimizing its overall funding costs. Eng. Sultan al Mamari, CFO at EDO, stated that the company is pleased with the success of the Sukuk, which set a new benchmark for Omani GRE pricing. He emphasized the importance of securing financing early amid a challenging global outlook and attributed the transaction's success to improved credit standings and investor confidence in EDO's strategy.
Since its inception, EDO has played a crucial role in developing a resilient and sustainable energy sector in Oman. The company has consistently delivered on its objectives, ensuring energy security and generating long-term value for the Sultanate.