Etihad Airways has signed the terms of a USD 400 million agreement for an Islamic lease financing facility that will be used to finance the airline’s acquisition of four Airbus A340-500 aircraft delivered in 2006.
In terms of this agreement, Citi, and ADCB acting as mandated lead arrangers and joint bookrunners for a consortium of six lenders, which includes, as mandated lead arrangers: ABC Islamic Bank, First Gulf Bank, Qatar National Bank Standard Chartered Bank, and as Arrangers: Arab African International Bank and China Construction Bank Corporation/ Hong Kong Branch, will provide financing valued at USD400 million to the airline.
The sale and lease back arrangement is the first Islamic financing deal to be concluded by Etihad Airways, and the largest Islamic deal of its kind to be concluded by an airline.
James Hogan, Etihad Airways’ chief executive, said: “This agreement sets a new standard for us. The cost of funding agreed between Etihad and the banks in the consortium represents an outstanding achievement. We believe that this partnership lays the ground work for future co-operation in the international arena.”
“During these first stages of the implementation of our three-year business plan, we are focused on establishing a commercial platform and strong corporate governance that will be good for our business and generate credibility and confidence in the international business community. We look forward to work with business partners who understand our shareholder mandate and business needs.”
Mr Hogan also acknowledged the high level of support from the Government of Abu Dhabi and the benefits of this relationship to the future of aviation in Abu Dhabi and the greater region.
The Etihad fleet presently comprises 25 aircraft and will expand to 31 by the end of the year, during which the airline will take delivery of two Airbus A330-200 and four Airbus A340-600 aircraft.
Mr Hogan added: “Etihad has set unprecedented standards for growth, which while earning it the title of the world’s fastest growing airline, have also created an expectation and benchmark that will be hard to match.”
Mohammed Al-Shroogi, Citi managing director for the Middle East and chief executive for Citi in the UAE, said: “We are happy to play the role of joint lead arranger of this facility on behalf of Etihad Airways, the national airline of the UAE. Through Citi Islamic Investment Bank, Citi has been a leading arranger of Islamic financing and we are honoured to introduce Etihad to this rapidly growing market.”
Eirvin Knox, chief executive of ADCB, said: “This deal represents another important and significant milestone in our extremely special relationship with Etihad Airways. ADCB has a long-term commitment to supporting crucial Abu Dhabi enterprises, and Etihad stands at the forefront of such exciting ventures and initiatives. We look forward to supporting Etihad in its quest, and will be steadfast in our resolve to assist Etihad with its fleet expansion in the years ahead.”
