Bank of Sharjah to manage, arrange Dh2B Sharjah government sukuk

Dubai - The certificates will pay a profit rate of 1.5 per cent and mature in May 2021.

The Sharjah government has raised Dh2 billion through Islamic bonds (sukuk) to support its economy, corporates, SMEs, individuals and banking sector during the coronavirus crisis, according to a statement issued on Monday.

Bank of Sharjah was appointed as sole lead manager and arranger for the issuance.

"The securities were issued under the Sharjah Liquidity Support Mechanism, a framework initiated by the government to enhance liquidity for the Sharjah banking system, and in co-operation with the Targeted Economic Support Scheme (Tess) of the Central Bank of the UAE," said the statement.

The certificates will pay a profit rate of 1.5 per cent and mature in May 2021.

Sharjah also listed $200 million sukuk on Nasdaq Dubai in March 2020.

S&P Global Ratings lowered Sharjah's outlook to negative last month and affirmed its long-term rating at BBB, the second-lowest investment grade.

Moody's Investors Service has projected that sovereign sukuk issuances will reach $75 billion in 2020 as compared to $71 billion last year, an increase of six per cent. The sovereigns will need more funds through sukuks amidst low oil prices and fall in revenues due to coronavirus pandemic.

waheedabbas@khaleejtimes.com