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Mon 28 Jul 2014 01:19 PM

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Sharjah said to mandate banks for debut sukuk deal

Emirate appoints HSBC, National Bank of Abu Dhabi and Standard Chartered to manage transaction - sources

Sharjah said to mandate banks for debut sukuk deal

The emirate of Sharjah has appointed HSBC, National Bank of Abu Dhabi and Standard Chartered to manage a debut sukuk transaction, according to two sources away from the transaction.

One of the sources said that Sharjah Islamic Bank and the investment banking arm of Kuwait Finance House, KFH Financial, were also mandated on the deal. The transaction could come as early as September.

Sharjah would become the fourth emirate from the UAE to issue bonds. Abu Dhabi and Dubai have used that market before although Ras Al Khaimah is seen as Sharjah's closest comparable.

Ras Al Khaimah has three sukuk notes outstanding and is rated A by both Standard & Poor's and Fitch, while Sharjah is rated A3 by Moody's and A by Standard & Poor's.

Ras Al Khaimah's outstanding 3.29% 2018 bond was trading at a Z-spread of 73bp on Monday morning, according to Tradeweb data.

In its first report on Sharjah published in May, Moody's said the A3 rating was based on the emirate's very strong fiscal and government debt position and the diversity of its economy.

"Aided by a competitive manufacturing sector, Sharjah's credit strength is also supported by the relatively higher degree of economic diversification, compared to the rest of the UAE and countries in the GCC," Moody's said in the report.

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