Emirates, the world’s biggest airline by international traffic, will start meetings with investors tomorrow for a possible sale of Islamic bonds, according to three people familiar with the matter.
The Dubai government-owned carrier hired Citigroup Inc., Standard Chartered Plc, Abu Dhabi Commercial Bank PJSC, Abu Dhabi Islamic Bank PJSC, Dubai Islamic Bank PJSC and Emirates NBD Capital Ltd. to arrange the meetings, said the bankers, who asked not to be identified because the details aren’t public. The sukuk will be denominated in dollars, they said.
Emirates raised $750 million from the sale of 12-year bonds in January. The senior unsecured notes were priced to yield 300 basis points, or three percentage points, above the seven-year U.S. dollar mid-swap rate, bankers familiar with the matter said Jan. 31. The amortizing bonds, which mature in February 2025, have a weighted average life of seven years.
Sales of Islamic bonds from Dubai have posted the best start to a year since 2006 as the government takes steps to form a global hub for Shariah-compliant finance in the emirate. Dubai-based issuers tripled Islamic bond sales last year to $4.6 billion as the city’s borrowing costs dropped twice as much as the global average for Shariah-compliant notes.
Profit at the Emirates Group fell to 2.31 billion dirhams ($629 million) in the year ended March 31, 2012 compared with 5.95 billion dirhams a year earlier as fuel costs rose. The airline will be more profitable this year, President Tim Clark said Feb. 10.
Passenger traffic through Dubai’s airport jumped 15 percent in January to a record 5.56 million, according to data released last month.