HSBC Financial Services (Middle East), the Dubai-based investment banking unit of HSBC Holdings, has been appointed by Oman’s Renaissance Services Company to arrange a $25 million convertible Eurobond.
The issue would be the first in the international market by an Omani company and the country’s second corporate issue, following the announcement last month that a Muscat-based bank is planning a convertible bond (MEED 3:10:97).
Created last year, Renaissance Services plans to use part of the proceeds of the bond issue to refinance bank debt which it raised earlier this year. That debt was incurred so that Renaissance could buy the remaining 49 per cent of four local companies involved in industrial and media services and training, in which it was already a 51 per cent shareholder. The coupon has not yet been set for the bonds, which will be quoted in Luxembourg and convertible in their fourth or fifth years.
The only international bond issued from Oman so far has been a $225 million sovereign issue in March, arranged by JP Morgan. In addition, the Oman LNG gas export project is planning a $500 million bond to be arranged by Chase Manhattan and Merrill Lynch, and the local United Power Company is due to sell $140 million- 170 million worth of bonds to the US market to refinance its existing bank debt in a transaction expected to take place in November. Goldman Sachs is arranging the sale.
In a separate development, Oman’s stock exchange, the Muscat Securities Market, and local companies are discussing a possible new requirement for listed companies to issue quarterly financial statements.