Bond facilitated using Abu Dhabi Global Market’s aviation finance structure
Natixis issues 12-year sukuk for aviation leasing, ADGM says
Abu Dhabi Global Market (ADGM), Abu Dhabi’s financial free zone, facilitated the issuance of a 12-year Islamic bond, or sukuk, by French Bank Natixis and the UAE’s Noor Bank.
The transaction marks the first time an ADGM-devised structure has been used specifically to hold aircraft assets in the issuance of sharia-compliant bonds, the free zone said in a statement to media on Wednesday – without revealing the size of the transaction.
“Aviation finance and leasing is global in its recognition and usage and is one of the world’s fastest-moving sectors, particularly in the Mena region,” said Dhaher Bin Dhaher Al Mheiri, chief executive of the ADGM Registration Authority.
Simon Eedle, regional head of Corporate & Investment Banking, Middle East, at Natixis, added: “This transaction allowed us to use our aviation and Islamic finance expertise to offer Islamic investors diversification into an otherwise unreachable asset class and open new sources of funding for aviation borrowers.”
ADGM is working to grow the emirate’s aviation finance and leasing sector, in line with the UAE’s ambitions to expand aviation beyond the airline industry and create a hub for the aerospace manufacturing and support services industries.
The sukuk designed by Natixis follows the completion of the first aviation sale and leaseback transactions arranged by the bank at ADGM at the end of 2016 – including one for Abu Dhabi’s flag carrier Etihad Airways – and the registration of three international aviation leasing companies at the free zone earlier this year.
The three leasing companies were Irish aviation services firms Airborne Capital Limited and Stellwagen Group, and UAE-based aircraft lessor International Airfinance Corporation (IAFC), which manages the $5 billion Aircraft Leasing Islamic Fund (ALIF) in the Middle East.