Dubai's Emirates Airline Set to Raise $600 Million in Sukuk SaleBy
Carrier sells 10-year amortizing Islamic bonds at 4.5% rate
Emirates joins a rush of borrowers from the Gulf region
Emirates is set to raise $600 million from the sale of Islamic bonds as the world’s biggest airline by international passengers joins a rush of borrowers from the Gulf region.
The Dubai government-owned carrier sold 10-year amortizing sukuk at a profit rate of 4.5 percent, the company said in an emailed statement. The yield was cut from an initial guidance, which was in the high 4 percent range, according to a person familiar with the deal who asked not to be identified because the information is private. Emirates will use the money for general corporate purposes.
Emirates joins a list of regional issuers seeking funding from bond markets before increases in U.S. interest rates push up borrowing costs. The emirate of Sharjah in the United Arab Emirates and Oman are among sovereigns that have raised funds via bonds so far this year, while Saudi Arabia is said to have selected banks to help manage an offering as soon as this month.
Bond sales from the six-nation Gulf Cooperation Council, which includes the two biggest Arab economies of Saudi Arabia and the U.A.E., have raised $20.3 billion so far this year, according to data compiled by Bloomberg. That is just short of the $22.3 billion raised in the same period last year, when sales were at a record $85 billion.
Citigroup Inc. and Standard Chartered Plc acted as global coordinators and joint lead managers for Emirates’ sukuk. Abu Dhabi Islamic Bank PJSC, BNP Paribas SA, Dubai Islamic Bank PJSC, Emirates NBD Capital Ltd., First Abu Dhabi Bank PJSC, HSBC Holdings Plc, JPMorgan Chase & Co. and Noor Bank PJSC helped arrange the sale.