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Capital Markets

Euromoney innovations in Islamic finance 2016: Emirates Airline

UK Export Finance $913 million sukuk (Khadrawy)

Innovations Islamic 2016 196w
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Joint lead managers: Abu Dhabi Islamic Bank, Citi, Dubai Islamic Bank, ENBD Capital, HSBC, JPMorgan, National Bank of Abu Dhabi, Standard Chartered Bank Airbus A380s do not come cheap. Needing long-term funding to buy four of them through its Khadrawy leasing vehicle, Emirates sought just over $913 million – and chose to use a sukuk to do it; the first time the Islamic structure had been used to pre-fund the acquisition of an aircraft.

The bigger significance of the deal was that it broke new ground with export credit agencies. “The sukuk marks the world’s first sukuk financing supported by an ECGD [export credit guarantee department] and the largest-ever capital markets offering in the aviation space with an export credit agency guarantee,” says Qudeer Latif, head of the global Islamic finance practice at Clifford Chance. The ECGD in this case was the UK Export Finance agency, for whom it was its largest-ever guaranteed debt capital markets transaction. 

The UK agency’s presence in an Islamic deal was in itself important and should be seen in the context of the UK’s aim to be a hub for Islamic finance.

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