Bank of Sharjah plans US$500m bond

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Bank of Sharjah P.J.S.C. (BOS:ADX) is firming up plans to issue a US$ 500 million (AED 1.84b) senior unsecured bond and has organised an investor roadshow with lead arrangers beginning on Thursday May 21st in London. The bank disclosed its board decision to issue a senior unsecured bond with a five-year term to shareholders in April. Bank of Sharjah has not yet confirmed if the issue will be an Islamic bond.

According to a document quoted by Reuters, Bank of Sharjah has appointed JP Morgan and National Bank of Abu Dhabi as joint coordinators, plus Commerzbank, Emirates NBD Capital and First Gulf Bank as joint lead managers to arrange investor meetings. Meetings are being arranged for London on Thursday 21 May, Geneva and Zurich on 22 May, the UAE on Sunday 24 May and Singapore on Monday 25 May.

Credit rating agency Fitch, has assigned a provisional rating of BBB+(EXP) to BoS Funding Limited, a Cayman Islands subsidiary of Bank of Sharjah established to act as issuer, in advance of the bank’s senior bond issue. Fitch assigns Bank of Sharjah a long-term issuer default rating (IDR) of ‘BBB+’ with a stable outlook, short-term IDR at F2 and Viability Rating (VR) at ‘bb+’.

Sharjah has a track record of successful bond issues, as confirmed by two major Islamic bond issues during the past year. Sharjah Islamic Bank (SIB) issued an unsecured US$ 500 million (AED 1.8b) 5-year sukuk in March of this year, which is now listed on Nasdaq Dubai. In September 2014, the Government of Sharjah issued its first sovereign sukuk at a size of US$ 750 million (AED 275b) with a lifespan of 10 years. Both recent issues were many times over-subscribed according to banks facilitating the bond issues.

Bank of Sharjah recently announced an 8 percent increase in first-quarter profits for 2015, following a tough 2014 during which bank net profit fell by 19 percent from AED 353 million in 2013 to AED 286 million last year.

Source: Bank of Sharjah, Reuters