Ahlibank facilitates the issuance of the Sultanate's first Islamic commercial paper for Oman Flour Mills
Muscat: In a landmark transaction that underscores its leadership in Islamic finance and commitment to financial innovation, ahlibank Investment Banking Division acted as the financial advisor to Oman Flour Mills for the issuance of the Sultanate of Oman's first Islamic Commercial Paper (ICP) raising OMR 10 million. ahli Islamic acted as the sharia-structuring advisor and Investment Agent for the issuance. The proceeds of this 365-day instrument will be used to finance the working capital needs of Oman Flour Mills at a competitive rate. This milestone marks a significant advancement in Oman's Islamic capital market by introducing a structured, Sharia-compliant short-term liquidity instrument for corporate financing. By spearheading this initiative, ahlibank reaffirms its role as a key enabler of market development, bridging corporate funding needs with innovative Islamic financial solutions.
Hanaa Al Kharusi, Senior General Manager – Wholesale Banking at ahlibank, stated, 'At ahlibank, we aim to craft win-win solutions which help meet the objectives of the corporates as well as the investors. Our goal is to drive financial inclusion, expand market opportunities, and support the nation's economic diversification. Through structured short-term liquidity solutions, we are enabling corporates to optimize working capital efficiently by diversifying their funding sources. This achievement paves the way for further advancements in Sharia-compliant financial instruments, positioning Oman as a dynamic hub for Islamic finance. As we continue to lead in this space, ahlibank remains dedicated to structuring solutions that not only benefit our customers but also contribute meaningfully to the nation's economic ambitions.'
Commenting on this success, Haitham Al Saadi, CFO at Oman Flour Mills, said, 'The successful issuance of Oman's first Islamic Commercial Paper is a significant milestone for Oman Flour Mills as we continue to optimise our liquidity management through Sharia-compliant financing solutions. This transaction enables us to access competitive short-term funding while supporting the development of Oman's Islamic capital market. We appreciate the collaboration with ahlibank's Investment Banking Division and ahli Islamic in structuring this innovative financial instrument, which aligns with our commitment to financial sustainability and market-leading practices.'
Commercial papers play a vital role in filling a gap by enabling high-grade corporates to raise short-term financing directly from investors. Further, Islamic Commercial Papers can help companies reduce their reliance on conventional borrowings and move toward becoming Shariah compliant.
The ICP issuance was met with strong investor demand from pension funds, money market funds and Islamic Banks, and received demand of 1.4 times the issue size, reflecting confidence in both the market and ahlibank's expertise in structuring Islamic financial products. By facilitating this transaction, the bank has further cemented its position as a strategic driver of product innovation in the Islamic finance sector, paving the way for future issuances and broader market participation.
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