SHARJAH: Sustainable bond goes to market, but questions remain about fiscal performance

GULF COUNTRIES - In Brief 27 Feb 2024 by Justin Alexander
Sharjah is in the market for a 12-year sustainable bond. It held investor meetings today (Tuesday 27th February) and the bond is likely to price on Wednesday. This is its second “sustainable” issuance, which is allocated to a broad range of both green and social spending (the investor's presentation today included examples ranging from a waste-to-energy plant to study programs at Sharjah University City). HSBC and Emirates NBD Capital are the joint global coordinators, with Citi, Credit Agricole and Standard Chartered serving as joint lead managers and bookrunners. Significantly, this issuance comes a year after Sharjah unveiled a Medium-Term Fiscal Outlook (MTFO), which envisaged certain controls on expenditure (reducing capex and limiting salary growth to 5% and other opex to 2%) and progress towards achieving a primary surplus in 2028-30. The market and rating agencies responded positively to the MTFO, alongside positive headwinds last year lifting the broader UAE economy, and Sharjah managed to hold on to its BBB- investment grade credit rating from S&P, which revised the outlook from negative to stable shortly after the MTFO’s publication. Moody’s had already downgraded to Ba1 in July 2022. In the investor presentation, Tom Koczwara, the Debt Management Office’s capable and longstanding advisor, presented a case that Sharjah was indeed delivering on the promise of the MTFO for several reasons. Firstly, the primary deficit for 2023 has come in at -AED4.7bn (about 3.3% of GDP), slightly lower than the MTFO projection (although it is a little higher than in the 2023 budget). Secondly, the 2024 budget targets a primary deficit of -AED3.7bn, similar to the MTFO. He als...

Now read on...

Register to sample a report

Register
Sign-in
Forgot your password?
Copyright 2024 GlobalSource Partners. All rights reserved. This is prepared for GlobalSource Partners’ clients and may not be redistributed, reproduced, stored in a retrieval system, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of GlobalSource Partners. This is distributed simultaneously to our website and other portals used by GlobalSource Partners. The information herein was obtained from various sources and is believed to be reliable but GlobalSource Partners does not warrant its completeness or accuracy. Neither GlobalSource Partners nor any Country Analyst, officer or employee accepts any liability whatsoever for any direct, indirect or consequential damages or losses rising from any use of this or its contents.