• International AirFinance Corporation is arranging a $400m Islamic loan on behalf of Kuwait Airways
  • It will finance the leasing of five A330-200 aircraft
  • National Bank of Abu Dhabi and Bahrain’s Arab Banking Corporation are the lead arrangers

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.

Stay informed with the latest in the Middle East
Download the MEED app today, available on Apple and Android devices