Emirates, the Dubai-based international airline has announced that plans to launch an international bond issue in 2004. The issuance will be denominated in US dollars for an initial amount of $400 million, stated a press release.
The bond will have a maturity of seven years and will offer investors a floating-rate interest. “This will be the first time that Emirates will have a bond issue listed outside Dubai,” said Chairman of Emirates, Sheikh Ahmed bin Saeed Al-Maktoum. He also disclosed that Emirates is preparing for the bond initially to be listed in Luxembourg and later on the Dubai International Financial Centre (DIFC) once operational.
“The bond will be joint-lead managed by HSBC, Emirates Bank International, National Bank of Abu Dhabi and National Bank of Dubai. It is anticipated that other banks will be invited into the deal to join the management group in due course,” added Sheikh Ahmed.
This issue will represent Emirates' second foray into the bond markets. In 2001 Emirates issued the first-ever United Arab Emirates (UAE) dirhams bond which was closed at Dh 1.5 billion ($408 million) due to heavy investor over-subscription within the UAE. This was also the first bond to be listed on the Dubai Financial Markets.
With the new bond issue announced today, Emirates will be aiming to develop an investor base outside the UAE, both within the rest of the Middle East and outside. According to Sheikh Ahmed, “The purpose of the bond issue is to raise funds for general corporate finance purposes. Emirates has a major expansion program planned for the coming years. Against this background we have taken the strategic decision to open up alternative sources of finance and investment.”
Emirates also indicated that the new securities will not be registered under the United States Securities Act. They may not be offered or sold within the United States or for the benefit of United States persons. — (menareport.com)
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