Oman expanded its first issue of sovereign Islamic bonds, selling 25 percent more than originally planned due to strong demand, the finance ministry said in a statement on Tuesday.

The ministry accepted orders worth 250 million rials ($650 mln) for the five-year sukuk ijara at a cut-off yield of 3.50 percent, it said in a statement. Orders for the 200 million rial offer totalled 336 million rials.
Investors included both conventional and Islamic institutions, the ministry added. It was the first time that a debt capital market issuance in Oman was priced through a book-building process with a uniform price auction.
The issue will set “a benchmark for future issuances by the government and also by the private sector players to meet their development and funding needs, while diversifying the financing base and risk away from the traditional banking sector,” Abdullah Al Salmi, executive president of the Capital Market Authority, said in the statement.
Mohammed Hussain Jawad, adviser at the finance ministry and head of the committee handling the issue, said earlier this week that the ministry planned a second sukuk issue next year. He did not elaborate on the size or timing.