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Emirates President Tim Clark stated the airline was ready to ‘wield a sledgehammer’ to a report that alleges the airline benefitted from government subsidies in the ongoing spat between the Gulf and US carriers. (File)
Emirates airline today announced that its 10-year $913 million (Dh3.35 billion) sukuk was subscribed 3.6 times, attracting $3.2 billion (Dh11.74 billion) orders.
The proceeds will be used to fund the acquisition of four Airbus A380-800 aircraft, which are expected to be delivered in April, May, June and July 2015. The aircraft will be leased to and operated by Emirates.
The sukuk has been priced at a profit rate of 2.471 per cent (90 basis points over the interpolated mid swap rate).
The deal attracted interest from a diverse group of conventional and Islamic investors. The sukuk were allocated to over 45 global institutional investors, with approximately 39 per cent distributed to the Middle East and Asia, 32 per cent to Europe and 29 per cent to the United States.
By investor type, approximately 47 per cent were distributed to fund managers, 38 per cent to banks and 15 per cent to insurance companies and pension funds.
The Dubai-based carrier said in a statement that the issuances marks the world’s first Sukuk financing supported by UK Export Finance and the largest capital markets offering in the aviation space with an Export Credit Agency guarantee. The transaction also represents the first time that a sukuk has been used to pre-fund the acquisition of aircraft and the first Sukuk financing for A380 aircraft.
“Emirates has always taken a diversified risk approach to our aircraft financing. Together with our bank partners and ECAs (UKEF, Coface and Euler Hermes), we continually look for solid and innovative opportunities in the global market to finance our growing aircraft fleet, and we are very pleased with the tremendous response to this landmark transaction,” said Nirmal Govindadas, Emirates Senior VP, Corporate Treasury.
“The strong and diversified investor demand for the offering is a testament to investor confidence in the strength of the Emirates franchise,” he added.
The sukuk, according to Emirates, will be listed on the London Stock Exchange and Nasdaq Dubai.
Citigroup Global Markets Limited, HSBC Bank, JP Morgan Securities and National Bank of Abu Dhabi acted as Joint Structuring Agents and Joint Lead Managers; Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD Capital Limited and Standard Chartered Bank acted as Joint Lead Managers and NCB Capital Company acted as Co-Lead Manager.
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