DUBAI - Arada Developments, the largest developer in the United Arab Emirate of Sharjah, has hired banks to arrange a debut sale of U.S. dollar-denominated Islamic bonds, a document showed on Tuesday.

The deal could be the first dollar bond sale out of the Gulf since late March, when the Sharjah government raised $750 million, also with sukuk. The region has seen a dearth of bond sales this year amid enduring market volatility and as many issuers turn to loans.

Dubai Islamic Bank Emirates NBD Capital and Standard Chartered Bank were hired as joint global coordinators. They are joined by Abu Dhabi Commercial Bank , Ajman Bank, Al Rajhi Capital, Kamco Invest, Mashreq, Sharjah Islamic Bank and Warba Bank as joint lead managers and bookrunners, the document from one of the banks showed.

They will hold investor calls between Tuesday and next Monday, which will be followed by the issuance of benchmark size five-year sukuk, subject to market conditions.

The Dubai-neighbouring emirate's largest real estate developer, set up in 2017, is rated B1 by Moody's and B+ by Fitch.

Arada is 40% owned by Basma Group, which is owned by Sheikh Sultan bin Ahmed Al Qasimi, Sharjah's deputy ruler, and 60% held by Corp KBW Investments, which is owned by Prince Khaled bin Alwaleed bin Talal Al Saud, a member of the Saudi royal family.

"The Sharjah government provided a guarantee for up to $436mn loan that Arada obtained for the Aljada land payment," Arada said in an investor presentation, reviewed by Reuters, in which it touted "proven support from the government & regulatory authorities".

Arada also said it has "access to premium land allotment with flexible payment plans". Aljada is the largest integrated development in the emirate and the developer said it can repay the loan over 16 years from project cash flows.

At the end of 2021, Arada had $251 million in debt, of which $118.68 million matures this year, and $128 million in cash, the presentation showed. A further $84.11 million in debt matures next year.

The company said it had a 70% market share of off-plan sales in Sharjah last year, up from 63% in 2020.

(Reporting by Yousef Saba, Editing by Louise Heavens)