DUBAI - Etihad Airways, wholly owned by the Abu Dhabi government, on Wednesday sold $600 million in five-year "transition" sukuk, or Islamic bonds, which help fund the shift to a greener future, a document showed.
It set the final spread for the sukuk at 200 basis points over mid-swaps and received more than $700 million in orders for the debt sale, the document from one of the banks arranging the deal showed. It began marketing in the mid-2% area on Tuesday.
The sukuk are part of a $3 billion sukuk programme expected to be rated 'A' by Fitch and will be unlisted. Investors had to sign a non-disclosure agreement to see Etihad's financials and invest in the notes.
Proceeds of so-called transition bonds are used by companies to gradually switch to more environmentally sustainable operations.
Etihad's plans include using more fuel-efficient planes and eliminating single-use plastics, according to an investor presentation. The airline aims to cut its 2019 carbon emissions level in half by 2035 and reduce emissions to zero by 2050.
HSBC HSBA.L and Standard Chartered acted as joint global coordinators and "joint sustainability structuring agents" for the deal.
Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank and Mashreqbank were also involved in the debt sale.
The airline also invited holders of its outstanding $1.5 billion sukuk due in 2021 to tender those notes for purchase by Etihad for cash, which ended on Monday.
(Reporting by Yousef Saba; Editing by Shri Navaratnam and Mark Potter) ((Yousef.Saba@thomsonreuters.com; +971562166204))