Clifford Chance advised Government of Emirate of Sharjah on Issue of US $750 Million Sustainable Bonds

Clifford Chance advised Government of Emirate of Sharjah on Issue of US $750 Million Sustainable Bonds

The new 12-year bond met with significant demand from local and international investors

Global law firm Clifford Chance has advised the Government of the Emirate of Sharjah, acting through the Sharjah Finance Department, on the issue of its US $750 million sustainable bonds under the government's Global Medium Term Note Programme (GMTNP).

The government issued US $750 million 6.125 percent sustainable notes due 2036 pursuant to Rule 144A and Regulation S of the US Securities Act, 1933 (as amended), under the GMTNP.

The new 12-year bond was issued at a price of 99.089, reoffering a yield of 6.234 percent. It met with significant demand from local and international investors, reflecting the growing demand for sustainable investment opportunities and the government's strong reputation.

The transaction had an order book of around US $4 billion and price tightening from initial guidance of 235bps over US Treasuries to final pricing of 195bps.

Under the issuance terms, the government will apply an amount equal to the net proceeds of the sustainable notes issued to finance or refinance eligible projects and expenditures in accordance with the Sustainable Financing Framework. The framework has been aligned with, among other publications, the guidelines specified in the 2021 edition of the Green Bond Principles published by the International Capital Market Association, the 2021 edition of the ICMA Social Bond Principles and the 2021 edition of the ICMA Sustainability Bond Guidelines.

On behalf of the Sharjah Finance Department, Tom Koczwara, the adviser in the Debt Management Office stated, “This is another important milestone in the Government of Sharjah’s efforts to maintain broad market access. The sustainable bond issuance reflects the importance of environmental and social initiatives in Sharjah and the increasing appetite from investors to understand the positive outcomes achieved with their funds.”

He added, “The market response highlights the government’s success in responding to investor demand and presenting a clear and credible credit narrative for the Emirate. Clifford Chance has again been a key partner to the government in this landmark transaction.”

Stuart Ure, the partner and head of the Middle East capital markets at Clifford Chance remarked, "With the growing investors’ demand globally for financing linked to environmental, social and governance factors, we are delighted to have supported the Sharjah Finance Department and the Emirate of Sharjah on another landmark issuance of sustainable bonds by a GCC sovereign. The success of the transaction is a testament to the consistent investor engagement by the Sharjah Finance Department."

The Joint Lead Managers and Bookrunners were Abu Dhabi Commercial Bank PJSC, Bank of Sharjah PJSC, Citigroup Global Markets Ltd, Crédit Agricole Corporate and Investment Bank, Emirates NBD Bank PJSC, First Abu Dhabi Bank PJSC, HSBC Bank plc and Standard Chartered Bank. HSBC and Emirates Bank acted as global coordinators and HSBC acted as the sole ESG structuring agent.

Clifford Chance has a long-standing relationship with the Government of the Emirate of Sharjah. Last year, it advised the government under the first sustainable issuance by a GCC sovereign, its Islamic Trust Certificate Issuance Programme. During the Covid-19 pandemic, the law firm guided on the Sharjah Liquidity Support Mechanism, which represented the first-rated short-term local currency tradeable instrument in the United Arab Emirates.

The Clifford Chance team was led by Stuart Ure, partner, and head of the Middle East capital markets. He was supported by associate Benedetta Tola.

The advice to US Securities was provided by London-based partner, Michael Dakin, who was supported by associates Terrence Moloney and Sarah Wetzel.

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