Oman Investment Fund Offers to Buy Blue City Bonds

Onyx Investments Ltd., a sovereign wealth enterprise (SWE) of the Oman Investment Fund (OIF), has made a tender offer to purchase class B senior subordinated notes of Blue City for 35 cents on the dollar. Starting in 2006, $925 million was raised from bondholders to finance construction of the beachside community. Blue City was funded by strict bond financing. The Blue City project was aimed at diversifying Oman’s tourism and luxury real estate sectors. The project missed sales targets as investors and consumers vacated the Gulf real estate markets.

In March 2011, Onyx Investments bought the Blue City class A1 and A3 notes from Dubai-based Essdar Investments Ltd. Essdar Investments is managed by Essdar Capital Managers Ltd. whose main shareholder is the Abu Dhabi royal family.

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