UPDATE 1-Sharjah reopens Gulf sukuk market with $500 mln 5-year deal

The emirate of Sharjah priced a $500 million five-year Islamic bond issue on Wednesday. The deal will help Sharjah narrow its budget deficit and also pave the way for other regional borrowers to complete deals after a lull of nearly three months as Gulf financial markets wobbled under pressure from increased geopolitical risk and oil prices slumping to a 12-year low. The deal was priced at a spread of 250 basis points over midswaps, the document showed, at around the same level as the initial price thoughts set on Tuesday. Adjusting for the tenor extension, the current transaction paid a new issue premium of between 35 and 40 bps, several investors and bankers said. The bond performed well in the secondary market with bid/offer quotes of 100.15-100.35.