Monday, May 30, 2011

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DUBAI (Zawya Dow Jones)--Emirates Airline's planned bond issue will likely be priced at 350 basis points over five-year mid swaps, with the official final pricing expected by the end of the week, two bankers familiar with the deal said Monday.

"Initial price whisper mid swaps +350. Final pricing is expected end of this week," one of the bankers told Zawya Dow Jones Monday.

Another banker familiar with the deal said the size is expected to be benchmark at around $500 million.

Deutsche Bank, Emirates NBD, HSBC Holdings Plc, and Morgan Stanley are all involved in the dollar-denominated bond, one of the banks hired to arrange the deal told Zawya Dow Jones last week.

Emirates Airline, the Middle East's largest carrier, met fixed-income investors in Hong Kong, Singapore, Dubai, Abu Dhabi and London last week. The airline has also scheduled meetings in Geneva on May 30.

"The initial pricing is very attractive and we even think it might go a bit tighter," a fixed-income trader said. "There's great liquidity in the market and investors are quite comfortable with the name but the lack of rating is a disappointment though for foreign investors who could not buy into it."

The notes are likely to be listed on the London Stock Exchange and the net proceeds of the issue will be used for general corporate purposes, according to Emirates' preliminary prospectus for the planned bond sale.

The Dubai government-owned carrier plans to have a total of 235 aircraft by 2017, adding 87 aircraft to its current fleet, as it expects more demand on existing routes and sees ample opportunities to tap new markets, it said in the prospectus.

Emirates Group's total borrowings and lease liabilities stood at $6.3 billion at the end of the financial year ended March 31, according to the prospectus. Emirates Airline at maturity in March fully repaid a $500 million bond that was listed on the Luxembourg Stock Exchange in 2004.

Emirates Airline, which currently flies passengers to 100 destinations in 61 countries worldwide, earlier this month posted a 55% year-on-year surge in net profit to $1.5 billion for its last fiscal year, boosted by double-digit gains in both passenger and cargo traffic. Revenues for the period rose 25% to $14.8 billion.

-By Mirna Sleiman, Dow Jones Newswires; +9714 446-1698; mirna.sleiman@dowjones.com

Copyright (c) 2011 Dow Jones & Co.

(END) Dow Jones Newswires

30-05-11 1043GMT