CDB, BoC, ICBC, and Bank of Communications contribute $3.2 billion to syndicated bullet loan to address Oman’s fiscal deficit (Linked to Project ID#85256)

On August 3, 2017, the Debt Management Office of Oman's Ministry of Finance signed a $3.55 billion unsecured, syndicated loan agreement with five Chinese state-owned banks. The syndicate consisted of China Development Bank (CDB), Bank of China (BoC), Bank of Communications, the Beijing Branch of Postal Savings Bank of China (PSBC), and the Industrial and Commercial Bank of China (ICBC). BoC, CDB and ICBC were the lead arrangers of the loan. The Beijing Branch of Postal Savings Bank of China (PSBC), which is majority-owned by the state-owned China Post Group Corporation, contributed $350 million to the syndicate. CDB, Bank of China, ICBC, and Bank of Communications contributed the remaining $3.2 billion (but the individual contributions of these four banks are unknown). The loan carried the following terms: a 5 year maturity period and an annual interest rate of LIBOR plus 190 basis points (1.9% margin). Repayment of the lump sum loan is due at the end of the loan period. The proceeds of the loan were to be used by the borrower to address the deficit in the government budget caused by a decline in oil revenues. Initially, Oman's Ministry of Finance looked to raise $2 billion syndicated loan; however, high levels of demand from Chinese banks allowed Oman's Ministry of Finance to negotiate a $3.55 billion deal.

Additional details

1. Project ID#66543 captures the $3.2 billion contribution from CDB, BoC, ICBC, and Bank of Communications. Project ID#85256 captures the $350 million contribution from PSBC. 2. The Chinese project title is 阿曼财政部综合授信 or 笔五年期无抵押银团贷款，总额35.5亿美元. 3. Several of the participants in the lending syndicate refer to the loan that they issued as a ‘sovereign loan’ (主权贷). 4. The interest rate that applies to the loan (3.353%) was calculated by taking the average 6-month LIBOR rate during the month (August 2017) when the loan agreement was finalized (1.453%) and adding a 1.9% margin. 5. This loan is not included in the Overseas Development Finance Dataset published by Boston University’s Global Development Policy Center in December 2020.

Number of official sources

8

Number of total sources

21