Sharjah Government Issues $750 Million Bond, Signaling Strong Investor Confidence

The Bank of Sharjah recently played a crucial role as a Joint Lead Manager and Bookrunner in the issuance of a US$750 million sustainable Bond for the Government of Sharjah. This 12-year U.S. dollar-denominated senior unsecured bond, structured under the 144A/Reg S format, has garnered significant attention from international and regional financial circles.

Highlighting the strong market confidence in the Government of Sharjah's financial health, the bond issuance saw an order book that surpassed US$ 4 billion. This level of investor interest is a clear indicator of the robust demand for Sharjah's credit story. The bond was issued with a spread of 195 basis points over U.S. Treasuries, a figure that is notably lower than the initial guidance of 235 basis points. This tightening of the spread is a testament to the high regard in which international investors hold the government's credit, with these investors accounting for 67 percent of the total demand.

Mohamed Khadiri, CEO of Bank of Sharjah, expressed his pride in the bank's involvement in this significant transaction. "We are honoured to have played a pivotal role in this landmark Bond issuance for the Government of Sharjah," Khadiri stated. He emphasized that this transaction not only demonstrates the bank's commitment to supporting high-quality capital market transactions in Sharjah and across the UAE but also highlights Sharjah’s strong economic fundamentals and prudent fiscal management.

Khadiri further commented on the successful outcome of this bond issuance, noting that it reflects positively on Sharjah’s creditworthiness and showcases Bank of Sharjah’s expertise in capital markets. He pointed out that the overwhelming response from investors and the subsequent tightening of the spread underscored confidence in Sharjah’s credit and the effective strategy employed by the Joint Lead Managers.

Concluding his remarks, Khadiri underscored Bank of Sharjah’s dedication to sustainable financing solutions. "This successful deal is another testament to Bank of Sharjah's continued commitment to ESG principles and sustainable financing," he said. Khadiri expressed his belief that such transactions would encourage other governments and corporates to prioritize sustainable practices, aligning their operations with global sustainability benchmarks and driving significant positive change.

The successful issuance of this sustainable bond by the Government of Sharjah, with Bank of Sharjah playing a key role, marks an important milestone in the region's financial market. It not only underscores Sharjah's solid economic position but also highlights the growing importance of sustainable finance in today’s global economy.

With inputs from WAM