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Tuesday, April 23, 2024

Sharjah’s Powerful $750 Million Sustainable Bond Issuance

Sharjah’s Triumphant $750 Million Sustainable Bond Launch

The Government of Sharjah has achieved a significant milestone with the successful issuance of a $750 million 12-year US dollar-denominated 144A/Reg S senior unsecured sustainable bond.

The issuance garnered substantial investor interest, with an order book surpassing $4 billion, signaling strong demand and confidence in Sharjah’s creditworthiness. Priced at a spread of 195 basis points over US Treasuries, tighter than the initial guidance of 235 basis points, the bond reflects robust international investor interest, which accounted for 67 percent of total demand.

Sharjah's Triumphant $750 Million Sustainable Bond Launch
Sharjah’s Triumphant $750 Million Sustainable Bond Launch


Playing a pivotal role in this landmark transaction, Bank of Sharjah, a prominent commercial bank in the UAE, served as a joint lead manager and bookrunner alongside other international and regional banks. Mohamed Khadiri, CEO of Bank of Sharjah, expressed pride in the bank’s involvement, emphasizing its commitment to facilitating strategic capital market transactions in it and across the UAE.

Khadiri highlighted the positive market response, with the spread tightening due to investor confidence in its credit and the effective structuring and marketing strategy employed by the joint lead managers. He underscored the significance of the transaction, reflecting it prudent fiscal management and strong economic fundamentals, while showcasing Bank of Sharjah’s expertise in capital markets and its ability to offer tailored financing solutions.

Furthermore, Khadiri reiterated Bank of Sharjah’s dedication to providing sustainable financing solutions in response to increasing demand from local and regional clients. He emphasized the bank’s commitment to environmental, social, and governance (ESG) principles, noting that the successful bond issuance aligns with its sustainability journey. Khadiri expressed confidence that such deals would inspire other governments and corporates to prioritize sustainable practices, serving as a catalyst for aligning operations and investments with global sustainability benchmarks.

The issuance of the $750 million sustainable bond by the Government of Sharjah, with Bank of it’s crucial involvement, reflects a significant achievement in capital markets. The overwhelming investor interest underscores confidence in its credit story and demonstrates the growing importance of sustainable financing solutions. As it continues its sustainability journey, supported by initiatives like this bond issuance, it sets a positive example for other entities to follow, driving meaningful change towards a more sustainable future.

This successful bond issuance not only signifies a financial milestone for Sharjah but also highlights the growing importance of sustainable finance in the global market. As environmental concerns continue to mount, investors are increasingly seeking opportunities to align their investments with ESG principles, making sustainable bonds an attractive option.

By issuing a sustainable bond, the Government of Sharjah is not only accessing capital but also demonstrating its commitment to environmental and social responsibility. The funds raised through this bond can be allocated to projects that promote sustainability, such as renewable energy initiatives, environmental conservation efforts, or social development programs. This not only benefits the environment and society but also enhances Sharjah’s reputation as a forward-thinking and responsible entity in the international community.

Bank of Sharjah’s involvement in this landmark transaction further solidifies its position as a key player in the region’s financial landscape. By leveraging its expertise in capital markets and commitment to sustainable finance, the bank is not only supporting it’s economic development but also contributing to the advancement of ESG principles in the region.

Looking ahead, the success of this bond issuance is likely to inspire other governments and corporates in the region to explore sustainable financing options. As awareness of environmental and social issues continues to grow, the demand for sustainable bonds is expected to increase, presenting new opportunities for issuers and investors alike.

The issuance of the $750 million sustainable bond by the Government of Sharjah, with Bank of Sharjah’s instrumental role, marks a significant step forward for both Sharjah’s economy and the global sustainable finance movement. As the world transitions towards a more sustainable future, initiatives like this bond issuance play a crucial role in driving positive change and creating a more resilient and equitable society for future generations.

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