Emirates may refinance US$550 million bond as borrowing costs fall
Source: BI-ME with Bloomberg , Author: Posted by BI-ME staff
Posted: Sun April 8, 2012 1:57 pm

UAE. Emirates, the biggest airline by international traffic, may refinance a US$550 million bond maturing in June, as borrowing costs decline, a company executive said.

“The market is awash with funds,” Gary Chapman, president of the airline’s dnata unit and services, told Bloomberg in a phone interview today. “At the moment the market is looking pretty attractive for good credit and there are funds available at relatively attractive pricing,” said Chapman, who also is responsible for finance at the company.

Bond sales by issuers in the Persian Gulf are off to a record start this year as borrowing costs decline, with regional companies and governments raising US$14.7 billion so far, the most for the same period since Bloomberg began tracking the data in 1999.

The average yield on Gulf debt fell to 4.56% March 28, the lowest in six months, the HSBC/NASDAQ Dubai GCC US Dollar Sukuk/Bond Index shows.

Emirates will study “the economics” of both bonds and sukuk, as Islamic debt is known, as refinancing options, Chapman said. A decision will be made after the company announces its annual results in early to mid-May for the 12 months ended March 31, he added.

The price on Emirates’ US$550 million floating-rate Islamic bonds maturing in June rose to 99.37 cents on the dollar on April 6, the highest since November 2007. The airline raised US$1 billion from the sale of a five-year bond in June. The yield on the 5.125% bond declined 86 basis points so far this year to 4.31% April 6.

The carrier, the Arab world’s largest, retains a “strong cash position” while “the performance of the bond we did has been very good,” said Chapman. Emirates, the biggest operator of Airbus SAS A380 superjumbos, wants to establish Dubai as a global hub in competition with Abu Dhabi-based Etihad Airways, Qatar Airways Ltd. and European carriers including Air France and British Airways. (IAG)

 

MIDDLE EAST BUSINESS COMMENT & ANALYSIS

date:Posted: August 26, 2014
INTERNATIONAL. Is it time to stop thinking about stabilizing Syria and Iraq and start thinking of a new dynamic outside of the artificial states that no longer function? To do this, we need to go back to Lebanon, the first state that disintegrated and the first place where clans took control of their own destiny.
date:Posted: August 25, 2014
INTERNATIONAL. Commodities have been generally flat on the week as a rise in industrial metals was offset by losses across other sectors such as metals and grains.
date:Posted: August 25, 2014
UAE. With its oil wealth, population growth and strong demand for industrial and consumer goods, the MENA region is an attractive market. There are, however, potential pitfalls in doing business, particularly when it comes to appointing local agents to distribute products in the region.
SAUDI ARABIA. Strong demand fundamentals combined with increased public and private sector spending pushed up the average sales price; Momentum expected to continue as Riyadh attracts and promotes investment in industrial and supporting logistics facilities.
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