International AirFinance Corporation (IAFC) has requested the National Bank of Abu Dhabi (NBAD) and the Bahrain-based Arab Banking Corporation to arrange a $400m-murabaha loan on behalf of Kuwait Airways.

It will finance the leasing of five Airbus A330-200 aircraft.

France-based Airbus listed the planes at $221.7m each in 2014.

The eight-year syndicated loan is expected to be closed at the end of May.

The borrower is a subsidiary of IAFC, which created the first Shariah-compliant aircraft leasing fund, seeded by Airbus and the Saudi Arabia-based Islamic Development Bank. The fund aims to lease a variety of aircraft to regional and international carriers.

The move follows Dubai’s Emirates Airline’s successful $913m-Islamic financing for the acquisition of four Airbus A380-800 aircraft.

The issuance was priced at a profit rate of 2.47 per cent, or 90 basis points over the mid-swap rate.

US bank Citigroup Global Markets, JP Morgan Securities, the UK’s HSBC Bank and NBAD acted as joint structuring agents and lead managers on the Emirates deal.