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Sharjah set to raise $1bn in sustainable bond debut

Person, Human, Money Creative Commons
Unifying multiple exchange rates is one of several steps sought by the IMF for Lebanon to clinch a $3 billion aid package

The government of Sharjah will raise $1 billion from a sale of nine-year debut sustainable bonds, a document on the debt sale showed.

“This is the first sustainable sovereign bond in the GCC, which indicates that the proceeds will be used for environmental or social purposes. This is broader than the ‘green bonds’ which several Gulf states including Qatar, Bahrain and Saudi Arabia have been considering,” said Justin Alexander, director of Khalij Economics and Gulf analyst for GlobalSource Partners.

There is growing demand by investors globally for financing linked to environmental, social and governance factors, and issuers in the Gulf have increasingly sought to tap such debt.

Sharjah’s bonds were set at a spread of 280 basis points over US Treasuries, the document seen by Reuters showed.

Initial price guidance was around 310 basis points over US Treasuries maturing in February 2033, a separate document on the sale showed earlier.

HSBC is the global coordinator. Abu Dhabi Commercial Bank, Citi, Gulf International Bank, Intesa Sanpaolo, Invest Bank and SMBC Nikko are joint lead managers and bookrunners.

Sharjah, the UAE’s third most-populous city, needs about $4.7 billion in financing this year for a $2.3 billion budgeted deficit and $2.4 billion in maturing bank loans, Alexander wrote in a research note last week.