Emirates launches US$500 million bond issue
Emirates' chairman, HH Sheikh Ahmed Bin Saeed Al Maktoum, announced recently that the debut Eurobond issue for Emirates is being launched at US $500 million. The issue will be a Floating Rate Note (FRN) with a tenure of seven years and will pay a...
Emirates' chairman, HH Sheikh Ahmed Bin Saeed Al Maktoum, announced recently that the debut Eurobond issue for Emirates is being launched at US $500 million. The issue will be a Floating Rate Note (FRN) with a tenure of seven years and will pay a margin of 0.8 per cent over six months USD Libor. The issue will be listed in Luxembourg.
This is the largest ever unrated Eurobond issue by an airline and also the largest unsecured issue by a corporation within the Gulf Co-operation Council. The response to the issue has been extremely positive and Emirates has been able to achieve a wide geographical spread of investors, with over a quarter from Europe and Asia and over half from outside the United Arab Emirates.
The bond achieved a new source of funding for Emirates with around two thirds from new investors. The airline's initial target was US $400m through this bond issue but it increased the final amount to US $500 million to satisfy investor demand.
The joint lead managers of the issue are HSBC, Emirates Bank International, National Bank of Abu Dhabi and National Bank of Dubai. HSBC is acting as sole global co-ordinator of the issue.
The size and pricing of the issue have been finalised as a consequence of a book building exercise undertaken alongside a series of roadshows and investor presentations made in London and the Middle East by senior members of the Emirates Management team.
Sheikh Ahmed said: "We are gratified by the investors' response to our first offer in the international debt capital markets, which testifies to their confidence in Emirates' financial performance. It is evident that our consistent profitability and sound management are recognised."
On behalf of the joint leads, David Moleshead, managing director, debt finance and advisory, Middle East, HSBC said: "We congratulate the management of Emirates in their vision and commitment in bringing the airline to the international capital markets."
Emirates operates services to 74 cities in 52 countries, including Malta. Emirates Airline operates three direct flights each week from Dubai to Malta: on Tuesdays, Thursdays and Sundays on the Airbus A330-200. Flights from Malta to Dubai fly via Tripoli. Maltese citizens work for Emirates both in Malta and Dubai.