The government of the emirate of Sharjah plans to issue a yuan-denominated bond in China, which could make it the first Middle East issuer in the Chinese interbank bond market, sources familiar with the matter told Reuters. Sharjah, one of the seven members of the United Arab Emirates, is in the process of applying to issue the instrument, known as a panda bond, said the sources, who declined to be named as the matter is not yet public. Sharjah is a relatively frequent issuer in the international debt markets, having sold $750 million of 10-year sukuk in 2014 and $500 million of five-year sukuk in January last year.
Other governments and companies in the Gulf are also weighing possible panda bond issues. Gulf governments and companies have boosted bond issuance over the past year because low oil prices have pushed state budgets into deficit and tightened liquidity in their banking systems.
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