Sharjah’s debut dirham-denominated sukuk broke new ground in Gulf capital markets. It was the emirate’s first public AED issuance and the first use of a single-price competitive auction for any sukuk or MTN draw-down.
Standard Chartered, acting as sole auction coordinator, devised the operational playbook and advised an ijara-only structure to suit the modest deal size while safeguarding Shariah clarity.
The auction architecture tackled a persistent pricing anomaly: local banks, supplying roughly 90% of AED demand, had been forced to pay premiums above the post-swap fair value implied by sovereigns’ dollar curves.
By letting investors – and particularly joint lead managers – bid aggressively for guaranteed allocations and earn an incentive fee, the format compressed spreads by 50 basis points from the maximum profit threshold, ultimately pricing 25bp inside Sharjah’s USD curve and about 30bp inside the AED fair value derived from that curve.
Demand for the transaction was strong, with orders peaking above Dh4.5 billion ($1.2 billion), a 4.565 times oversubscription.
