MUSCAT, 04 September 2019
• RO 100,000 is the minimum subscription for the tender
• RO 125 million to be raised over a 12 month period
• CDs will be of varying maturity periods – one year, two year and three year – and will offer better rates than Bank FDs
Bank Muscat, the flagship financial services provider in the sultanate, has announced plans to raise RO25 million from a Certificates of Deposit (CD) auction to be held on 19 September 2019. The CDs will be issued on 24 September 2019 to all eligible investors as per the competitive bidding process.
Bank Muscat will be issuing CDs of varying maturing periods to address investors who are looking at medium-term investment options. These will include one-year, two-year and three-year CDs, which will carry coupon rates of 4%, 4.25%, and 4.50%. Bank Muscat plans to mobilise a total of RO125 million from CDs issued over a 12 month period.
Investors may bid for a minimum of one CD of RO100,000, and thereafter in multiples of RO100,000 each. The CDs will carry a fixed coupon rate and the interest will be paid semi-annually. Once allotted, CDs may be transferred among eligible investors as one CD (RO100,000) or multiple CDs (multiples of RO100,000). They will be redeemed at par value along with the interest accrued on the date of maturity.
Proceeds from the issue of the CDs will be used for general banking purposes. The issuance of the CDs over a one year period is expected to provide greater stability to the local financial markets as well as to the Omani economy as a whole. The CDs will also encourage a better savings culture in the Sultanate and provide a reliable and stable medium-term avenue to invest surplus funds.
Applications, bidding and allotment
All institutions as well as Omani and non-Omani individuals with a bank account in Oman are eligible to apply for the certificates of deposit. Investors may submit up to three bids at various interest rates during the bidding process on the bid date till the end of banking hours. Applications will be processed and the successful bids will be announced the next working day.
Applications will be allotted on the basis of ascending order of interest rates beginning with lowest yield and up to the point at which the entire CD amount has been subscribed. If there are more bids at the last accepted yield than is available to be allotted, the allotment for such applicants will be made on a pro rata basis.
Application(s) for CDs may be allotted in full or in part or rejected in full of the total amount applied for, based on Bank’s discretion. The Bank reserves the right to reject any application which does not fulfil the criteria at the bank’s sole discretion. Allotment notification to successful applicants will be emailed to the email ID provided by the applicant.
Application forms will be available on the Bank’s website prior to the Auction and Auction results will be announced on the Bank’s website www.bankmuscat.com next day morning after the auction date.
Investors can email their bids to the secure email ID: email@example.com along with all relevant KYC documents or submit their sealed physical application by dropping them in the Bidding Box kept at the Bank Muscat Head Office at Airport Heights, Seeb, during banking hours (8am-12pm) from 8 to 19 September 2019.