‘Etihad, Abu Dhabi likely to reject bondholder complaints’
A file picture taken on October 14, 2012 shows the Etihad Airways headquarters in the Emirati capital Abu Dhabi. Etihad Airways and Abu Dhabi’s Department of Finance are likely to reject calls for a meeting with disgruntled bond investors in the belief that their complaints have no legal merit, sources close to the matter told Reuters. In 2015 and 2016 Etihad issued $1.2bn in bonds in a partnership with airlines it partly owned at the time, including Alitalia and Air Berlin. The bonds are now in default because the European airlines, which are now insolvent, have not honoured their part of the obligations. The sources said that a group of international institutional creditors have complained to Etihad and the Abu Dhabi Department of Finance that, when the bonds were marketed, Etihad had promised to support the other airlines to make them profitable. “By definition, that means it would have supported the airlines to cover their debt obligations,” one of the sources said. The group of creditors is mostly composed of hedge funds and is being advised by law firm Dechert, which declined to comment. Etihad declined to comment, while Abu Dhabi’s Department of Finance did not respond to a request for comment.