Dubai Aerospace prices $2.3b in bonds for deal

Company’s acquisition of lessor AWAS, is subject to regulatory approval

Dubai Aerospace Enterprise (DAE) has priced $2.3 billion (Dh8.4 billion) in senior bonds split across three tranches, the company said yesterday.

DAE priced $500 million of 4 per cent notes due in 2020, $800 million 4.5 per cent bonds due in 2022 and $1 billion 5 per cent bonds due in 2024, according to a company statement.

DAE, the aircraft leasing and maintenance company controlled by the government of Dubai, will use part of the proceeds from the bond sale, together with cash on hand, to pay for the acquisition of Dublin-based lessor AWAS, announced earlier this year.

Reuters reported on June 19 that DAE planned to raise up to $2 billion to finance part of the AWAS acquisition. DAE said in April it was acquiring AWAS from private equity firm Terra Firma Capital Partners and the Canadian Pension Plan Investment Board (CPPIB).

The acquisition, subject to regulatory approval, is expected to close in the third quarter.

DAE will emerge as one of the world’s major aircraft lessors once the deal completes, increasing its fleet from 131 owned, managed and committed jets to 394 with a total value of over $14 billion. It will have more than 110 airline customers across 55 countries. DAE is to consider an aircraft order of more than 20 aircraft once the acquisition completes, Chief Executive Firoz Tarapore said.

It is interested in buying narrow and wide-body jets from Airbus and Boeing, and turboprop aircraft from ATR which is co-owned by Airbus and Italy’s Leonardo.