Dubai-based plane lessor DAE issues $1bn of bonds

The notes, due on August 2024, mark the second time that the company has tapped international debt markets in 2021

DAE, one of the world’s largest aircraft leasing companies, said the bonds will be used for general corporate purposes. Courtesy Dubai Aerospace Enterprise

Dubai Aerospace Enterprise (DAE), the Middle East’s biggest plane lessor, said it issued $1 billion in bonds due in August 2024, making it the company's second debt issuance this year.

"The net proceeds from the notes will be used for general corporate purposes including redemption of certain outstanding debt securities issued by DAE," the company said in a statement on Wednesday.

In February, DAE's chief executive Firoz Tarapore told The National that DAE may raise more funds if the conditions are right after it issued $2.25bn of new bonds to repay debt and to fund its growth.

The company raised $1.25bn in a two-tranche sale of unsecured bonds in January. It also sold $750 million in Islamic bonds, or sukuk, in November 2020.

Governments and companies in the Gulf have tapped debt markets in an effort to shore up their finances amid the pandemic.

GCC issuers are on track to issue $125bn worth of bonds this year, in line with the total for last year, according to estimates by Franklin Templeton.

DAE, which posted a decline in first-quarter profit, is expecting business to pick up on the back of a faster pace of vaccination roll-out over the next six months.

Earlier this month, credit ratings agency Moody’s Investors Service revised DAE's outlook to stable from negative and affirmed its Baa3 issuer rating, citing the company's strong liquidity position and capital management as well as signs of recovery in air travel.

The Dubai-based plane lessor's total available liquidity was $3.3bn in the first quarter, compared to $2.7bn at the end of December 31, 2020.

Cash and cash equivalents grew to $717.4m at the end of the quarter, from $577.3m in the same quarter last year.

Its net debt-to-equity ratio was 2.65 times at the end of the quarter, compared to 2.57 times at the end of last year.

DAE is one of the world’s largest aircraft leasing companies with offices in a number of countries. The company had a total owned, managed and committed fleet of 377 aircraft as of March 31.