Etihad Airways and Natixis have completed a sale and leaseback for two 2016 vintage Airbus A380 aircraft. Both aircraft are owned by special purpose companies based in the new Abu Dhabi Global Market (ADGM) financial centre and are leased to Etihad for a period of 12 years.
This marks the first aviation finance transaction in ADGM since the recent enactment of the Cape Town Convention and Aircraft Protocol 2001 into its insolvency framework to support its ambition to be an aviation financing and asset management hub in the UAE and the MENA region.
The deal marks Etihad’s first operating lease of an Airbus A380. The 12-year operating leases are leveraged with a combination of Islamic and conventional tranches of debt arranged by Natixis, which acted as Sole Lead Arranger, whilst Dubai Islamic Bank (DIB), First Gulf Bank (FGB) and Union National Bank (UNB) acted as co-arrangers.
As a result of this transaction, Natixis and ADGM are in advanced discussions for setting up an aircraft investment platform in ADGM which will target investors looking for high US dollar yield.
HE Ahmed Al Sayegh, Chairman of ADGM, said: “We are pleased to welcome both global industry leader Natixis and our national carrier Etihad Airways to the ADGM family. The civil aviation scene in the UAE and Abu Dhabi has generated significant opportunities and is expected to grow exponentially in the next decade. In addition, the Middle East is a vibrant aviation hub with airports increasing their handling capacity and airlines expanding their fleet to address global demand. These, in turn, fuel further demand for aviation financing.”
“The aviation industry can continue to rely on ADGM’s established platform to expand its global presence, at the same time, gain access to unique and tailored financing and services to achieve objectives. We look forward to working closely with Natixis to support their business strategy in Abu Dhabi and globally.”
James Hogan, Etihad Aviation Group President and Chief Executive Officer, said: “We are delighted to have worked with Natixis on this landmark transaction in the ADGM. This transaction validates the continued dedication of ADGM’s Board of Directors to support the growth of Etihad Airways and the civil aviation sector by establishing a framework that caters to the aviation industry’s financing needs.”
Ramki Sundaram, Global Head of Aviation at Natixis, added: “We’re very pleased to lead this sale and lease back of the A380 aircraft for Etihad. What’s more, we’re delighted to be involved in the first aviation transaction from ADGM and to play a part in supporting ADGM’s ambitions to grow in the aviation sector. It has been a pleasure to work on this transaction with a syndicate of Middle Eastern banks which further underpins the region’s commitment to aviation finance. The success of this transaction also highlights Natixis’ expertise in arranging and efficiently executing a broad range of aviation transactions, and our dedication to providing value-added capital solutions to clients.”
A full analysis of this deal will be feature in the upcoming issue of Airline Economics, along with the full list of winners from last night’s Aviation 100 European and Global Leaders Awards, held at the Royal Dublin Society.Date: January 17, 2017