Tilal Development Co., the Omani real estate developer, had sold the country's first Islamic bond or sukuk. The said offer amounts to OMR 50 million or USD130 million sukuk to prepare the way for other similar issuances by other Omani companies.

The five year sukuk offer, has a profit rate of 5% and is based on an ijara structure. This is a lease agreement used commonly in other Islamic markets. This was privately placed with investors according to finance arranger Al Madina Investment Group.

Oman had started to make Islamic finance part of the overall market last year, the last one of the six Gulf Cooperation Council states to undertake the same. The Omani government is currently preparing for the issuance of a sovereign sukuk and this is set to be done by 2014.

Tilal's sukuk is rated BBB+ by Capital Intelligence of Cyprus and its proceeds would be used for the expansion of the Tilal Complex in Muscat. This is a flagship project of the company that comprises of the Muscat Grand Mall and attached residential and office space.