Emirates NBD arranges Air Lease Corporation’s USD 600 million inaugural sukuk

Emirates NBD, a leading banking group in the Middle East, North Africa and Turkey (MENAT) region, has successfully priced a USD 600 million Sukuk for Air Lease Corporation (ALC), marking the first Sukuk issued by a US corporation.

The five-year Sukuk witnessed robust demand, attracting orders of over USD 2.2 billion, which led ALC to increase the offering to USD 600 million. The strong order book allowed ALC to tighten the profit rate by 30 basis points to 5.85%, at a spread of 185 basis points over US treasuries. The structure of the Sukuk was in line with the latest Shari’ah standards and the issue was anchored by Middle Eastern investors, who accounted for 80% of the allocation. The Sukuk, priced flat to its existing conventional curve, attracted many high-quality institutional investors outside the US, assisting ALC to diversify its existing investor pool.

ALC is consistently ranked as one of the world’s largest aircraft leasing firms and has raised over USD 20 billion through the bond market. The corporation has 417 aircraft in its fleet and a net book value of USD 24.5 billion.

Greg Willis, Executive Vice President & Chief Financial Officer, Air Lease Corporation said: “ALC is proud to have partnered with Emirates NBD on this landmark transaction. As the first North American corporate Sukuk offering, we are excited to demonstrate the depth and strength of liquidity in the Middle East market. The transaction is a testament to ALC’s broad access to capital and we look forward to expanding our funding footprint in this region. The quality and breadth of demand for the transaction exceeded our expectations and we are thankful to our banking partners, investors and advisors for their support in achieving this outcome.”

Mohammad Al Bastaki, CEO of Emirates NBD Capital, said: “We are proud to have supported the successful pricing of ALC’s inaugural sukuk, marking the first time a US-based corporation has issued a benchmark sukuk. The robust oversubscription and the participation of high-quality institutional investors from the Middle East will support ALC’s efforts to diversify its investor base and reflects the high demand for Shari’ah-compliant issues outside of the region. We expect this milestone issue will incentivize other non-regional issuers to consider sukuk issuances.”