Abu Dhabi – Mubasher: The Sharjah government is planning to launch a yuan-denominated bond in China, Reuters reported on Thursday, citing unnamed sources as saying.
The bond would make the emirate’s government the first in the Middle East to issue debt in the Chinese interbank bond market, the news agency added, noting that the size of the issue remains unknown.
The panda bond is a bond issued in yuan by a non-Chinese issuer and sold in the People's Republic of China, whose interbank bond market is the third largest after the US and Japan.
Over the past year and since the sharp drop witnessed in oil prices, governments and companies in the Gulf have resorted to bond and debt issues in order to meet their growing budget deficits and finance their spending.
Not new to the bond-issuing scene, the emirate of Sharjah, in the UAE, had previously sold a $750 million 10-year sukuk in 2014 and a $500 million five-year sukuk in January 2015.
Other GCC governments are also considering panda bonds.
Last week, Saudi Arabia’s vice minister of economy and planning Mohammed al-Tuwaijri revealed that the Saudi government “was willing to consider” financing itself partly in yuan in order to cover its budget deficit and other major investment projects, according to Reuters.
