Sharjah turns to the debt market to raise investment capital

The government of Sharjah is tapping the debt markets to help fund large-scale infrastructure and economic development programmes. On March 8 the emirate closed the book on a dollar-denominated sukuk, valued at $1bn. The 10-year bond was listed on the NASDAQ Dubai with an initial price of 150 basis points over the 10-year mid-swap rate, which then tightened to 135 basis points. Demand was high and the bond was oversubscribed, at around $2.4bn. Book runners were local, regional and global lenders, including the Sharjah Islamic Bank (SIB), Dubai Islamic Bank, HSBC and Standard Chartered. In early February the emirate also became the first Gulf sovereign issuer to tap the Chinese interbank bond market, issuing a RMB2bn ($318.4m) Panda bond. The increased investment is expected to boost GDP growth, with ratings agency S&P anticipating growth of 2.5% per year by 2020.