Commodities

Etihad Airways plans transition Islamic bonds

Credit: REUTERS/VASILY FEDOSENKO

Etihad Airways, wholly owned by the Abu Dhabi government, is planning to sell U.S. dollar-denominated 'transition' sukuk, or Islamic bonds, a document issued by one of the banks leading the deal showed.

Adds details

DUBAI, Oct 20 (Reuters) - Etihad Airways, wholly owned by the Abu Dhabi government, is planning to sell U.S. dollar-denominated 'transition' sukuk, or Islamic bonds, a document issued by one of the banks leading the deal showed.

Proceeds of so-called transition bonds are used by companies to gradually switch to more environmentally sustainable operations.

Etihad has hired HSBC and Standard Chartered as joint global coordinators and "joint sustainability structuring agents" for the planned deal.

Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank and Mashreq Bank will also be involved in the transaction.

The planned sukuk, which will be issued depending on market conditions, will have a five-year maturity and are part of a $3 billion sukuk programme expected to be rated 'A' by Fitch.

A series of fixed income investor calls ahead of the deal will begin on Oct. 22, the document said. One source familiar with the deal said the transaction is likely to be at least $1 billion in size.

The airline has also invited holders of its outstanding $1.5 billion sukuk due in 2021 to tender those notes for purchase by Etihad for cash, the document said.

Etihad did not immediately respond to a request for comment.

(Reporting by Davide Barbuscia and Yousef Saba; editing by Jason Neely and Louise Heavens)

((Davide.Barbuscia@thomsonreuters.com; +971522604297; Reuters Messaging: davide.barbuscia.reuters.com@reuters.net))

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