UAE’s DAE secures $1.6bn from multi-tranche financing deal

UAE aircraft leasing company Dubai Aerospace Enterprise (DAE) has signed a multi-tranche finance deal for $1.6bn with 26 lenders, making it the largest loan amount raised by the aircraft leasing firm to date.

The facility, which was structured as a combination of revolving credit facilities and term financing facilities, comprised conventional and Islamic tranches.

HSBC and J.P. Morgan were joint book-runners and mandated lead arrangers on the deal.

The aircraft leasing company said proceeds from the facility will be used to support the future financing needs of the business and refinance a maturing credit facility.

The facility was raised to more than twice the initial size due to significant demand. It allowed the Dubai-based lessor to tap the Islamic banking liquidity and consolidate its existing banking relationships in the Middle East, Asia, North America, and Europe.

“The closing of the facility, as well as the upsizing and oversubscription, underscores the support and confidence that banks have shown in DAE and its future growth prospects,” said Firoz Tarapore, CEO of DAE.

“The facility will allow DAE to maintain its exceptional liquidity and support the financing requirements of our recently announced order book acquisition.”

DAE’s growing portfolio

Meanwhile, DAE acquired 64 Boeing 737 MAX aircraft from a subsidiary of China Aircraft Leasing Group in August.

The acquired portfolio encompasses various models, including the 737 MAX 8s, 737 MAX 9s, and 737 MAX 10 aircraft. It’s worth noting that the certification process for the 737 MAX 10 is still pending.

DAE said the scheduled aircraft delivery is set to take place between 2023 and 2026. The company’s half-year profit before tax rose 13 per cent to $150.4m while its revenue surged by 15 per cent to $670.1m from $582.8m for the same period in 2022, driven by an increase in net lease revenue and maintenance services.

“We have continued with our programme of active liability management, repurchasing a further $102m of principal amount of our bonds during the quarter, bringing the total to $307m in the first six months of 2023,” Tarapore said earlier in August.

The company has a strong liquidity coverage ratio of 281 per cent and $2.3bn in available liquidity.

Founded in 1985, DAE serves more than 170 airline customers in over 65 countries, and the group’s leasing division manages a fleet of about 425 Airbus, ATR, and Boeing aircraft.

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