Emirates Sukuk nets US$824 million

The order book has been closed at US$550 million.

The issue will be a Floating Rate Note (FRN) with a tenure of seven years and will pay a return to investors of 0.75 per cent over six months USD Libor. The issue will be listed in Luxembourg.

This is the first-ever Islamic sukuk issue by an airline and also the first ever sukuk with a term of seven years, with the principal proceeds being paid on maturity.

The response to the issue has been extremely positive and Emirates has been able to achieve a wide geographical spread of investors, with over 40% from Europe /Asia and over half from outside the United Arab Emirates.

The Mandated Lead Manager of the issue was Dubai Islamic Bank who were also Joint Book Runners along with HSBC and Standard Chartered Bank. The Joint Lead Managers on the issue were National Bank of Abu Dhabi, Gulf International Bank and UBS Investment Bank.

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 the GCC by senior members of the Emirates Management team.

Sheikh Ahmed said: "Even though we have received an over subscription on the sukuk, Emirates has closed the book at US$550 million as indicated during the road shows. We are gratified by the investors' response to our first sukuk offer, 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 Mandated Lead Manager, Saad Abdul Razak, Chief Executive Officer of Dubai Islamic Bank, said: "We congratulate the management of Emirates in their vision and commitment in bringing the airline to yet another new source of funding."

The proceeds of the Islamic Sukuk Bonds issue will be used to finance Emirates' new Engineering Centre, now under construction at a cost of Dhs1.3 billion, for completion early in 2006, and the new Emirates Group headquarters, estimated to cost Dhs700 million and expected to be inaugurated by the end of next year.