DAE Capital, the aircraft leasing financial business arm of Dubai Aerospace Enterprise (DAE), has secured $450 million (Dh1.65 trillion) guaranteed loan facility from Citibank to fund the purchase of nine aircraft from Boeing, DAE said yesterday.
With delivery scheduled between June 2009 to April 2010, the Export-Import Bank of the United States will guarantee 100 per cent of the principal and interest, DAE said in a statement.
It added that DAE also plans to issue a capital markets note to replace the borrowing from this facility and further diversify its funding sources in the near future.
"This transaction helps DAE pave the way to fund its aircraft purchase commitments for the next 12 months. It will also allow us to access a different investor base for our obligations and build our distribution strategy," Dr Omar bin Sulaiman, DAE Group Managing Director, said in the statement.
The move comes close on the heels of DAE Capital signing a financing agreement worth more than $500m in end-April this year with the Export-Import Bank, to support the purchase of 10 Boeing aircraft.
The deal was said to support the delivery of these aircraft by guaranteeing commercial loans or providing the loan itself, DAE had said then, adding that the aircraft will be allocated for purchase and leaseback agreements with Emirates and Garuda Indonesia.
With its fleet currently comprising 35 single-aisle and wide-body aircraft, DAE Capital has an additional 26 aircraft contracted of which 17 are on a purchase and lease-back basis.
The company said it has also committed to invest in a fleet portfolio with an estimated market value of $27bn that will gradually encompass 100 Airbus A320 family and A350 XWB aircraft, and 100 Boeing 737 Next Generation aircraft and wide-body planes, which will commence delivery in 2010.
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