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BankMuscat raises RO 100 million Tier II capital

MUSCAT, 3 April 2012 – BankMuscat, the flagship financial institution in the Sultanate, successfully raised RO 100 million (USD 260 million) of Tier II capital through private placement of fixed income subordinated paper with tenors of 61 months to 84 months. The issue attracted considerable interest from institutional investors.  BankMuscat Investment Banking was the sole placement manager for the transaction.

The Tier II issue comes on the back of an upgrade in BankMuscat's long-term rating by Standard & Poor's, the leading global credit rating agency, from 'BBB+' to 'A-' with a stable outlook.  The stable outlook reflects S&P's expectation that BankMuscat will remain the dominant player in Oman and experience no significant change to its business and financial profile over the next two years.  The increase in rating constitutes an affirmation, by S&P, of BankMuscat's strong business position, strong capital and earnings, moderate risk position, average funding, and adequate liquidity. 

Commenting on the Tier II capital raising, Dr. Abdulrazak Ali Issa, Chief Executive, said: “BankMuscat is delighted with the continuous confidence and support from investors. The Tier II capital raising will bolster BankMuscat's capital and support the growth in its asset book."  Dr. Abdulrazak further commented that “BankMuscat is committed to lending its full support to the socio-economic development in Oman and this capital raising will strengthen the Bank's ability to extend finance to further enhance Oman's development domestically and increase its competitiveness internationally."

BankMuscat raised a total of USD 430 million in Tier II capital of which USD 170 million was from IFC Capitalisation Fund.  IFC Capitalisation Fund is a global equity and subordinated debt fund founded by the International Finance Corporation (IFC), a member of the World Bank group, and the Japan Bank for International Cooperation. It aims to strengthen banks that are considered vital to the financial system of emerging market countries.