Al Salam buys Boeing jets for Emirates
Dubai, January 9, 2013
Bahrain-based Al Salam Bank said it has acquired equity stake in two brand new Boeing 777-300 ER for offering on a12-year-long renewable term lease to Dubai national carrier Emirates.
This is Al Salam's third investment in aviation sector. The bank had previously acquired in 2007 a Boeing 777-200ER on lease to the Malaysian Airlines.
Commenting on the acquisition, Talal Abdul Aziz Al Mulla, the acting head of investment, said, "This is an unique investment opportunity with a high quality asset and a financially strong lessee. The investment comes in line with the bank’s strategy in providing opportunities producing regular income and continuous cash returns."
The Boeing 777-300ER is considered one of the most popular amongst the B777 family with backlog of orders exceeding 270 aircrafts. There are approximately 28 operators of this type of aircraft.
The aircraft is on a long term lease to Emirates thus providing an opportunity for investors to benefit from a regular income stream secured by a top tier airline.
Emirates had recently published its results for the year ended March 2012 generating revenues of $17 billion, an increase of 15 per cent from the previous year. The latest financial results marked a remarkable 24th consecutive year of profitability.
Anwar Murad, the head of private banking, said it is the third investment opportunity in the aviation sector that has been offered to Al Salam Bank accredited investors.
"The investment offers an attractive yield of 9 per cent per annum and is a good tool to diversify investors’ income stream. Both opportunities were remarkably oversubscribed by GCC investors," he observed.
This reflects the level of trust in Al Salam Bank’s investments and the overall banking industry in the Kingdom, he added.
Novus Aviation acted as the lease and aircraft manager, while International Bureau of Aviation acted as the technical advisor and Clifford Chance Middle East provided legal advice on the transaction.-TradeArabia News Service
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