Dubai’s aircraft lessor DAE adds more banks to bond deal

By Ashika Rajan, Trainee Reporter
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Dubai Aerospace Enterprise (DAE), one of the world’s largest aircraft leasing companies, has added more banks to its planned sale of US dollar-denominated bonds, which would be its second this year, as per the reports.

Dubai government’s primary investment arm, the Investment Corporation of Dubai-owned DAE, will issue bonds in tranches of three-and or seven-year to exercise a call option on bonds due next year and 2024.

The profits from the new bonds will also be used for general business purposes. The bonds will be of benchmark size, which generally means at least $500 million.

A document from one of the banks on the deal seen by sources did not specify a tenor and said that DAE hired BNP Paribas, Credit Agricole, Emirates NBD Capital, JPMorgan, and Trust Securities to organize fixed income investor calls.

The investor presentation and a separate document from one of the banks both revealed that the agreement had been expanded to include more banks.

US-based Fifth Third Securities, First Abu Dhabi Bank, Goldman Sachs International, HSBC, Mizuho Securities, Morgan Stanley, and Natixis join the other banks as joint book-runners and lead managers. As co-managers, Bank ABC, Commercial Bank of Dubai, Deutsche Bank, and Gulf International Bank were hired.

According to sources, DAE’s profit in 2020 fell nearly 40 percent to $228.9 million from $377.5 million the previous year. The presentation showed that the company’s fleet consists of over 425 aircraft worth around $16 billion, with an average fleet age of six years and a remaining lease term of 6.8 years.

It has $3.3 billion in available liquidity, $8.5 billion in net debt, and a net debt-to-equity of 2.65 times. Its Chief Executive Officer stated in an investor presentation that over two-thirds of its debt is unsecured, and the company intends to steadily grow this.

In January, DAE raised $1.25 billion with a dual-tranche unsecured bond deal.

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