The Bank of Sharjah recently announced that it successfully priced a $500 million senior unsecured bond in the international markets. The issuance received tremendous response from international investors, attracting orders that peaked at $1.4 billion.
The bonds have a tenor of five years from the date of issuance, with a coupon of 5.25 percent per annum.
Following global investor calls and a physical roadshow in Dubai and London, the bank was successfully able to tighten the pricing by 25 basis points from the initial price talk due to strong demand from international and regional investors.
“Being our fifth foray into the public international capital markets, the new issue provided us with an opportunity to deepen our relationships with existing investors while also attracting new ones regionally and internationally,” stated Mohamed Khadiri, CEO of Bank of Sharjah.
Bank’s new strategy boslters growth
The new bond issue marks an important milestone in the transformation of the Bank of Sharjah. The bank accessed a diverse group of investors and ensured that the pricing reflected the turnaround in the bank’s performance under its new strategy.
Under the bank’s new strategy, net profit increased to AED171 million during the first half of 2024 from a loss of AED144 million during the same period last year. Bank of Sharjah witnessed substantially higher net interest income, stringent credit underwriting, and lower operating costs.
Net interest income surged by 108 percent while operating income grew by 34 percent. In addition, the cost-to-income ratio significantly improved to 40.1 percent due to the adoption of cost discipline measures.
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“The final pricing compared very favorably to that of the past deals and cements a solid base for future issuances,” stated Damian White, head of treasury at the Bank of Sharjah.
The advisors for the bank’s issuance included Abu Dhabi Commercial Bank, Al Ahli Bank of Kuwait, Bank ABC, Citigroup Global Markets Limited, Doha Bank, Emirates NBD Capital, First Abu Dhabi Bank, Kamco Investment Company, Mashreq, QNB Capital and Standard Chartered.
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