Standard Chartered will help Oman’s debt management office raise the funds that could be backed by the World Bank’s Multilateral Investment Guarantee Agency.
Oman is seeking to raise as much as $1.2 billion to finance infrastructure at the country’s Duqm Special Economic Zone.
may raise the financing through a loan or bond with a potential maturity of 15 to 20 years, said the official, asking not to be identified.
The financing would help the government diversify its funding sources, extend its debt maturity profile and reduce costs, the official said. MIGA, which provides political risk insurance, is evaluating the proposal, he said.
Oman has one of the weakest finances in the Gulf Cooperation Council. The country is rated one notch above non-investment grade by Moody’s Investors Service and Fitch Ratings, while Standard & Poor’s Global Rating has it at junk.
The decrease in oil prices through 2016 drove Oman’s budget deficit to 21.6 per cent of gross domestic product. The country has more than doubled its external debt in the three years through 2017, according to IMF data.
Oman was the first Gulf state to tap international capital markets this year to bridge its budget deficit, selling $6.5 billion of bonds. Together with its sale in January, the sultanate raised $18 billion from the sale of dollar bonds since the start of 2016.