Oman Property Developer Sells Country’s First Sukuk

Omani real estate developer Tilal Development Co has sold the country’s first Islamic bond, a 50 million rial ($130 million) sukuk that could pave the way for similar issues by other companies in the sultanate.

Tilal’s five-year sukuk, offering a profit rate of five per cent and based on an ijara structure, a leasing arrangement commonly used in other Islamic markets, was privately placed with investors, arranger Al Madina Investment said on Tuesday.

Oman began to introduce Islamic finance last year, becoming the last of the six Gulf Cooperation Council states to do so. The government has been laying plans to issue a sovereign sukuk, and the sale could occur next year.

Tilal will use proceeds from its sukuk, rated BBB+ by Cyrpus-based Capital Intelligence, to expand the Tilal Complex in Muscat, a flagship project which includes the Muscat Grand Mall as well as residential and office space.