The deal will finance aircraft including the Boeing C-17 heavy lift transporter and the Airbus A330-200 multi-role tanker transporter.
Waha seals Dh6.7bn aircraft deal
Waha Capital has closed financing deals worth Dh6.7 billion (US$1.82bn) from a syndicate of international banks for the purchase of nine military aircraft for the UAE Armed Forces. The deal will finance aircraft including the Boeing C-17 heavy lift transporter and the Airbus A330-200 multi-role tanker transporter. Waha, an Abu Dhabi finance firm with interests in aviation leasing and property development, also revealed that the UAE military signed a contract for six C-17s from Boeing last month, although neither side publicly announced the deal. It represents an increase from four C-17s announced last year in a letter of intent between Boeing and the UAE Armed Forces. The three A330 aerial refuelling tankers were purchased in February 2008.
Waha said it raised the capital from eight international banks over a 30-day period during which Dubai World announced it was restructuring its debt. "The deal closed in a very quick amount of time in a difficult situation," said Hussein al Nowais, the chairman of Waha Capital. The two loans comprise Dh4.4bn for the three A330s and Dh2.3bn for a portion of the contract for the six C-17s. Additional financing will be required for the rest of the C-17 package.
Mr al Nowais said the deals received attractive financing terms. According to people familiar with the matter, the interest rate for the loans was about 150 basis points above the London interbank offered rate (Libor). The international banks were chosen above local banks because they were able to respond faster and offer attractive rates, officials said, while noting that UAE institutions were being consulted for subsequent finance projects.
Eight international banks participated in the two financing deals, comprising a syndicate of British banks and one large North American bank. This is the first financing deal arranged by Waha Capital on behalf of the Armed Forces, which is in a major upgrade of the country's air defence capabilities. The UAE is considering buying more than $15bn in new aircraft including French fighter jets, Italian fighter trainers as well as American-made cargo planes, helicopters and missile defence systems.
The two aircraft types in the military financing deal will enable the UAE to bolster its homeland defences as well as increase its role in regional security and humanitarian relief. Each C-17 can carry 77 tonnes and may be used to support UAE peacekeeping efforts in Afghanistan. Each C-17 reportedly costs $217 million each. Both the Airbus tankers and the Boeing airlifters will be delivered between next year and 2012.
Waha, which trades on the Abu Dhabi Securities Exchange, said its aviation leasing unit portfolio included more than 100 aircraft worth Dh16bn. @Email:email@example.com