Yesterday, the Emirate of Sharjah sold 10-year sukuk, worth $750 million, in the second international bond offering this year.
A document of one of the banks participating in the process showed that the emirate sold Islamic bonds at a return of 3.2%, 30 basis points below the initial indicative price, after the sukuk attracted subscription requests of more than 2.75 billion dollars.
Sharjah’s economy is diversified, with the mining and quarrying sector, which includes crude oil and natural gas, contributing only 4.3% of the nominal GDP last year, according to the prospectus.
The emirate has a long-term rating of (BBB-) with a stable outlook from Standard & Poor’s, a rating of (Baa3) with a negative outlook from Moody’s, and has raised $1.25 billion from a conventional two-tranche bond deal. In March, it consisted of papers for 12 and 30 years.
Last year, Sharjah raised a total of $2.25 billion by selling sukuk, issuing 30-year Formosa bonds, and reopening subscriptions to an existing bond issue.
HSBC is the issuance coordinator, and Abu Dhabi Islamic banks, Dubai Islamic, Sharjah Islamic, Standard Chartered, and the Islamic Corporation for the Development of the Private Sector participate in the transaction.
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