DAE secures additional financing to bolster its liquidity

Plane lessor finalised new senior unsecured term financings worth $780m and an extension on a 24-month revolving credit facility

DAE said earlier this month that it acquired 23 new aircraft and signed 147 lease deals in the first nine months of this year. Photo: Dubai Aerospace Enterprises

Dubai Aerospace Enterprise, the Middle East's biggest plane lessor, secured additional financing that would help strengthen its liquidity amid a challenging period for the global aviation industry.

The company finalised new senior unsecured term financings worth $780 million in two transactions and $800m of 24-month revolving credit facility maturity extensions until 2025 from 2023, DAE said in a statement on Tuesday.

“These new financings and facility extensions underscore DAE’s commitment to maintaining exceptional liquidity and a strong balance sheet as we navigate challenging trends in the aviation industry," Firoz Tarapore, chief executive of DAE, said.

"This, combined with the diversity of our approximately 400 lender and investor relationships, has allowed us to operate confidently during the period.

“Our capital strength along with capital from our managed asset mandates has allowed us to provide in excess of $3 billion of purchase commitments to our airline clients and OEMs [original equipment manufacturers] during the pandemic.”

The outlook for plane lessors has been brightening as international travel picks up and confidence to travel returns gradually.

DAE, which is owned by the Investment Corporation of Dubai, said earlier this month that it acquired 23 new aircraft and signed 147 lease deals in the first nine months of this year. The company also sold an equal number of planes and added three new managed customers during the period.

Of the 23 aircraft acquired, DAE Capital, the company's aircraft leasing division, owned 10 and managed 13, while it owned 16 planes and managed 7 of the 23 aircraft sold.

DAE also reported healthy liquidity levels in the first half of this year. Available liquidity at the end of the first six months of the year climbed to $4.09bn, from $2.69bn a year earlier, the company said earlier this year.

The company also raised $1bn from the debt market in June – its second funding deal after having raised $1.25bn in a two-tranche sale of unsecured bonds in January. The company also sold $750m in Islamic bonds, or sukuk, in November last year.