(Bloomberg) --
The tiny emirate of Sharjah hired banks to raise as much as $1 billion from international debt markets, joining wealthier Gulf states to shore up its finances against the fallout of the coronavirus pandemic.
The third-biggest sheikhdom in the United Arab Emirates mandated HSBC Holdings Plc, Mashreqbank PSC, Sharjah Islamic Bank and Dubai Islamic Bank PJSC among others for the deal, people with knowledge of the matter said.
A sale could happen as soon as this week and proceeds will be used for general budgetary needs, the people said, asking not to be identified because the information is private. A representative for the government of Sharjah declined to comment.
S&P Global Ratings lowered Sharjah's outlook to negative last month and affirmed its long-term rating at BBB, the second-lowest investment grade.
Related: Abu Dhabi Sells $3 Billion in Bonds as Borrowers Stockpile Cash
The coronavirus pandemic coupled with a collapse in oil prices is putting a strain on the finances of Middle Eastern energy producers, prompting Saudi Arabia, Qatar, members of the UAE and Bahrain to sell more than $30 billion of bonds this year. Abu Dhabi recently raised additional funds from international debt markets just weeks after a $7 billion bond sale as it took advantage of a drop in borrowing costs.
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