Air Lease Corporation (ALC) has successfully closed its inaugural sukuk issuance. The transaction, settled on March 15, 2023, represented the first ever offering of its kind into the Middle East market from a North American corporate and the largest sukuk from a US-based borrower in history.
The offering consisted of US$600 million 5.85% trust certificates due April 1, 2028, paid semi-annually, pursuant to Rule 144A and Regulation S. The notes are rated “BBB” by both S&P and Fitch with a Stable Outlook and listed on the London Stock Exchange.
“This inaugural sukuk offering is a testament to ALC’s strong credit profile and further evidence of our commitment to a well-diversified, global funding program,” said Gregory B. Willis, executive vice president and chief financial officer of Air Lease Corporation. “We are grateful to our banking partners for their commitment and support in structuring and executing this landmark transaction. Thank you to Bank ABC, DIB, Al Rayan, Citi, Deutsche Bank, Emirates NBD, JPMorgan, KFH Capital and Warba Bank who served as our joint lead managers. In addition, thank you to Allen & Overy and Clifford Chance for their legal guidance and the entire Air Lease team for their support in making this transaction a huge success.”
“We are proud to highlight the strong liquidity in this region and the opportunity for other investment grade borrowers to raise funds at cost efficient rates. This transaction complements our strong airline relationships in the Middle East and we look forward to further developing our funding presence in this region,” added Daniel Verwholt, senior vice president and treasurer of Air Lease Corporation.
Bank ABC acted as sole arranger, structurer and joint lead manager.
Commenting on the landmark transaction, Christopher Wilmot, Group Head of Treasury & Financial Markets, Bank ABC, said: “We are proud to have played a leading role in this historic corporate Sukuk issuance from the US. With ALC's robust aviation business and solid financial position, the issuance presented an attractive Shari'a compliant investment opportunity for regional investors. We are committed to opening this avenue of funding for our clients in our core US market, enabling them to access a wider pool of liquidity. I would like to thank ALC, and all participating banks, for their trust and confidence in Bank ABC's Debt Capital Markets & Islamic Finance services and all the teams involved from across the Group in making this transaction a remarkable success."
ALC intends to use the net proceeds of the offering for general corporate purposes, which may include the purchase of commercial aircraft and the repayment of existing indebtedness