Emirates eyes new aircraft lease deal
Source: BI-ME with Reuters , Author: Posted by BI-ME staff
Posted: Wed June 20, 2012 10:13 am

UAE. Dubai's Emirates airline EMIRA.UL, the largest customer of Airbus' A380 superjumbo, plans to lease aircraft under an arrangement with a financing firm which intends to issue bond-type certificates to fund delivery of the planes.

Doric Nimrod Air Finance Alpha (DNA2_p.L) is eyeing a possible issue of dollar-denominated Enhanced Equipment Trust Certificates (EETCs) to finance aircraft to be leased to Emirates.

Goldman Sachs Inc (GS.N) has been mandated by DNA2 to arrange investor meetings ahead of the potential issuance starting in London on June 22 before moving to the United States, according to an announcement from the bank on Tuesday.

Any subsequent transaction, which will be open to qualified institutional investors in the United States, will be subject to market conditions.

An EETC is a financial security used in aircraft finance where the airline gets ownership of the planes on maturity of the certificates. The transactions are similar to a form of secured debt financing like mortgages.

No details on size or tenor of the anticipated issue were available.

Emirates, one of the world's biggest airlines by passenger numbers, will make lease payments to DNA2 to cover the cost of funding, and pay the coupon to certificate holders.

"Anyone who buys the bonds is essentially taking a view on Emirates making the lease payments on time in order for Doric to pay the holders," said a regional banker, declining to be identified.

The airline ordered 90 A380 aircraft in 2010, of which 21 had been delivered by May this year.

Despite a slowdown in 2011 when the company posted a 72 percent drop in net profit, Emirates expects to continue seeking out new routes to sustain its fast pace of growth.

Last week, Emirates, which is unrated, repaid a $550 million Islamic bond, or sukuk, in full at maturity.

 

MIDDLE EAST BUSINESS COMMENT & ANALYSIS

date:Posted: September 23, 2014
TUNISIA. Removing the economic obstacles would double employment creation to 100,000 new jobs per year, according to a new report from the World bank.
date:Posted: September 23, 2014
INTERNATIONAL. Currency debasement is often done by inflating the money supply through QE; When a currency is debased, a unit of that currency doesn't buy the same amount of stuff that it once did.
date:Posted: September 23, 2014
UAE. The broad based recovery witnessed in the residential sector over the past 18 months has now slowed down, as rental prices and sale values have stabilized in most locations.
INTERNATIONAL. The United States and several Gulf Arab allies launched air and missile strikes on Islamic State strongholds in Syria on Tuesday, U.S. officials said, opening a new, far more complicated front in the battle against the militants.
dhgate