Emirates picks banks to arrange Islamic bond

(MENAFN- Arab News) DUBAI: Emirates the Dubai-based airline has hired eight banks to arrange an Islamic bond that will be guaranteed by Britain''s export credit agency a document from lead arrangers showed on Thursday.

The deal assumes significance as this is the first time the export credit agency has guaranteed a sukuk as Islamic bonds are known. London is seeking to boost its position as a center for Islamic finance.

The airline has picked Citigroup HSBC JP Morgan and National Bank of Abu Dhabi as the

joint structuring agents with Abu Dhabi Islamic Bank Dubai Islamic Bank Emirates NBD and

Standard Chartered also acting as joint lead managers the document showed.

This confirmed a Reuters story from February which said the airline had hired banks to help it arrange a sukuk of up to $1 billion.

The Islamic bond will be of benchmark size the document said normally understood to mean upward of $500 million.

No details about when the company might meet fixed income investors to market the transaction have been announced. One source with direct knowledge of the deal said the company had

already met a clutch of investors and so might not need to put on a roadshow.

Another source added the issue was expected to hit the market in the coming week. Both sources declined to be named as they were not authorised to speak to the media.

Export credit agencies aim to provide funding to companies outside their countries on the proviso that the money is used to support home industries.

Emirates is the largest customer for the Airbus A380 for which the wings are assembled at the manufacturer''s plant in Broughton Wales.

UK Export Finance expected to guarantee an Islamic bond in 2015 issued by a customer of Airbus Britain''s Finance Ministry said in October. This came after Britain became the first Western nation to sell an Islamic bond attracting bids worth more than 10 times the 200 million pounds ($299 million) on offer.