Mandated Lead Arrangers and Bookrunners Dresdner Kleinwort - the Investment Banking Division of Dresdner Bank AG, UniCredit Markets & Investment Banking acting through Bayerische Hypo- und Vereinsbank AG and Wachovia Bank, N.A. today announced the signing of a USD 200 million Syndicated Term Loan Facility for Bank of Sharjah.
The signing ceremony took place at The Fairmont Dubai and the Facility Agreement was signed by Bank of Sharjah General Manager Varouj Nerguizian, Deputy General Manager Mario Tohmé and the investors.
Bank of Sharjah’s debut facility was extremely well received in the market and enjoyed an oversubscription of 72 per cent. The borrower decided to increase the size of the facility to USD 200 million, from the launch target of USD 150 million, and investors were subsequently scaled back. The transaction was supported by 27 banks from 16 countries, highlighting Bank of Sharjah’s financial strength and reputation across all regions.
The facility was fully and equally underwritten by the three mandated lead arrangers and book-runners.
Borrower Overview
Established in 1973, Bank of Sharjah (“BOS” or the “Bank”) was the first of four banks to be incorporated in the Emirate of Sharjah. The bank is focused primarily on corporate banking and investment activities, including traditional corporate banking services, project finance, trade finance facilities and small and medium enterprise (“SME”) banking, as well as a growing involvement in direct equity investments aimed at prime corporate entities and high performing SMEs spread over the Mena region. Its client base is mainly UAE-based corporates as well as government-related entities and SMEs.
BOS was founded by the Government of Sharjah (20%), Banque de Paris et des Pays-Bas (currently BNP Paribas, “BNP”) (20%) and Mr. Mubarak Al Hassawi (20%) with the remainder owned by local investors. BNP divested its holdings in 2002, but its former representatives remain on the board in their personal capacity.
BOS is the 13th largest bank in the UAE and the largest in the emirate of Sharjah with UAE dirham (AED) 7.6 billion in assets (USD 2.1 billion), AED4.8 billion in deposits (USD 1.3 billion) and AED3.8 billion in gross loans (USD 1.0 billion) as of December 31, 2006. The Bank has demonstrated consistently strong financial performance, asset quality, liquidity and capitalization.
As of December 31, 2006, net income for BOS amounted to AED320.1 million (USD 87.2 million), non-performing loans were 2.2% of total gross loans, provisions for non-performing loans stood at 90.8%, total liquid assets amounted to 32.9% of total assets and the risk-adjusted capital ratio stood at 25.4%.
Fitch Ratings (“Fitch”) has assigned Bank of Sharjah a Long-term Issuer Default Rating of ‘A-‘, a Short-term Rating of ‘F2’, an Individual Rating of ‘C’ and a Support Rating of ‘1’.
Similarly, Capital Intelligence (“CI”) assigns a Long-term Foreign Currency Rating of ‘BBB+’, a Short-term Foreign Currency Rating of ‘A2’, a Financial Strength Rating of ‘BBB+’, and a Support Rating of ‘3’. Both Fitch and CI maintain a ‘Stable’ outlook on the ratings. Both agencies cite strong profitability, solid capitalization, good asset quality and strong management as a basis for their respective ratings.
Summary details of the Loan Facility are as follows:
Borrower: Bank of Sharjah
Amount: USD 200,000,000
Facility Type: Syndicated Term Loan Facility
Purpose: General funding purposes
Tenor: 36 months from the Signing Date
Repayment: Bullet at maturity
Margin: 35 bps p.a.
