First ever Debt Capital Markets issuance by Dubai Aviation Corporation

20 November 2014

Dubai Aviation Corporation (trading as “flydubai”), today came to the market with a landmark debut Sukuk transaction and successfully raised $500 million through a 5 year Sukuk.

Dubai, UAE: Dubai Aviation Corporation (trading as "flydubai"), today came to the market with a landmark debut Sukuk transaction and successfully raised $500 million through a 5 year Sukuk. The order book was over 6 times oversubscribed demonstrating the strong investor appetite for this paper. The well-planned and swift execution took advantage of the positive market environment to build a high-quality order book for a 5 year Sukuk.

The $500mn 5 year Sukuk priced at a profit rate of 3.776%, equivalent to 200 basis points over the 5-year USD Mid-swaps. The issuance is a stand-alone. Proceeds of the issuance will be used for general corporate purposes and refinancing.

The issuance was extremely well received globally and generated a large order book with over 150 investors placing orders of approximately US$3 billion. Orders were received from a wide range of high quality fixed income investors, including fund managers, private banks, and banks from a wide geographic spread across Asia, Europe, the Middle East, and offshore US. The high-quality and diversified order book enabled flydubai to price the transaction at a very tight spread, after two price revisions.

The 5 year Sukuk issuance saw a geographic distribution of 64% to Middle East accounts, 25% to European accounts, 7% to Asia, and an additional 4% to US offshore.

In terms of distribution among types of investors, the 5 year Sukuk saw a diverse allocation with 65% to Banks, 20% to Fund Managers, 8% to Private Banks and an additional 7% going to other types of investors.

Statement from His Highness Sheikh Ahmed Bin Saeed Al Maktoum, Chairman of flydubai

"We are very pleased at the excellent market reception to flydubai's landmark Sukuk issue. The highly successful offering demonstrates the confidence which international investors place in the Emirate of Dubai and its entities and confirms the access to funding which our corporates enjoy from the Islamic Capital Markets. Investors' strong interest resulted in the order book reaching to over US$3 billion, over 6 times of the offer amount. This is a highly successful result that further confirms the credibility of flydubai and the investors' confidence in the promising outlook for flydubai, and Dubai's status as a leading global aviation hub. The outcome is a testament to the invaluable support provided by the Government of Dubai to our institution and the wider industry, and part of the ongoing visionary leadership of His Highness, Sheikh Mohammed bin Rashed Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai."

The Joint Lead Managers on the transaction were Crédit Agricole CIB, Dubai Islamic Bank P.J.S.C., Emirates NBD Capital, HSBC, National Bank of Abu Dhabi P.J.S.C., Noor Bank P.J.S.C., Standard Chartered Bank.

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