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DAE signs $480m credit facility

Four-year revolving credit facility expandable to $800m

Gulf News

Dubai: Dubai Aerospace Enterprise (DAE), the aircraft leasing company, announced on Monday it has signed a $480-million (Dh1.76 billion) credit facility, expandable to $800 million.

In a statement, DAE said the credit facility is an unsecured four-year revolving one, with an initial commitment of $480 million, an a feature that allows the facility to be increased at any time after the initial closing.

The facility was coordinated by Al Ahli Bank of Kuwait, which also acted as lead arranger and joint book runner. First Abu Dhabi Bank was another joint book runner and lead arranger, as well as the global agent. Noor Bank acted as the mandated lead arranger.

Firoz Tarapore, chief executive officer of DAE, said the transaction underlines the regional liquidity available to the DAE franchise.

“This facility further diversifies our funding sources and adds to the unsecured component of our liquidity profile, increasing our unsecured revolving credit facilities to $1.12 [billion] to $1.45 [billion], depending on the final committed amount of this facility,” the CEO said.

If the facility is fully drawn and the proceeds are used to pay down secured indebtedness, DAE’s percentage of unsecured debt will increase from 26 per cent to 31-34 per cent, Tarapore added.

Al Ahli Bank of Kuwait said the financing facility for DAE is one of the largest transactions of its kind involving conventional and Islamic tranches.

The financing deal comes as the DAE is in talks to buy 400 aircraft from Airbus and Boeing, in a $40 billion investment, according to Reuters reports. Tarapore told Reuters that DAE is interested in buying Airbus A320neos and Boeing 737 MAX aircraft following its acquisition last year of Dublin-based AWAS.

DAE is not close to finalising that order, however.

In late April, Tarapore also said that DAE is planning to issue bonds worth at least $500 million. The CEO told Gulf News the debt, which will be in the form of sukuk, will be issued either this year or the next depending on market appetite.

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