Etihad Airways signs USD 400 million agreement for Islamic lease financing


Abu Dhabi : Etihad Airways has signed the terms of a USD 400 million agreement for an Islamic lease financing facility that will be used to finance the airline’s acquisition of four Airbus A340-500 aircraft delivered in 2006.

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In terms of this agreement, Citi and ADCB, acting as mandated lead arrangers and joint bookrunners for a consortium of six lenders which includes, as mandated lead arrangers, ABC Islamic Bank, First Gulf Bank, Qatar National Bank, Standard Chartered Bank, and as arrangers, the Arab African International Bank and China Construction Bank Corporation (Hong Kong Branch), will provide financing valued at USD 400 million to the airline.

The sale and lease back arrangement is the first Islamic financing deal to be concluded by Etihad Airways and the largest Islamic deal of its kind to be concluded by an airline.

James Hogan, Etihad Airways’ chief executive, said: “This agreement sets a new standard for us. The cost of funding agreed between Etihad and the banks in the consortium represents an outstanding achievement. We believe that this partnership lays the groundwork for future cooperation in the international arena.

“During these first stages of the implementation of our three-year business plan, we are focused on establishing a commercial platform and strong corporate governance that will be good for our business and generate credibility and confidence in the international business community. We look forward to work with business partners who understand our shareholder mandate and business needs,” he added.