Dubai Aerospace targets $2.1 billion dual-currency financing

Dubai Aerospace Enterprise (DAE) is seeking a $2.1 billion loan to finance working capital requirements, with five major banks arranging a seven-year facility denominated in US dollars and UAE dirhams.

The proposed financing brings together Bank of China, Emirates NBD, Oversea-Chinese Banking Corporation, Industrial and Commercial Bank of China and China Construction Bank (Asia) Corporation as mandated lead arrangers and bookrunners.

The dollar-denominated tranche could carry an interest margin of 110 basis points above the Secured Overnight Financing Rate (SOFR), while the dirham portion could be priced 95 basis points above the Emirates Interbank Offered Rate (EIBOR).

The proposed margins remain indicative, and the final borrowing costs will depend on the applicable benchmark rates and agreed financing terms. Details of the allocation between the two currencies have not been disclosed.

DAE, which is wholly owned by the Investment Corporation of Dubai, operates aircraft leasing and aviation engineering businesses. The planned borrowing would provide additional financing capacity for its operations, although the company has not publicly confirmed the facility’s final terms or completion.

The involvement of four Asian banking institutions alongside Emirates NBD reflects the geographical composition of the proposed lending group. Their participation comes amid continuing regional geopolitical uncertainty, which has complicated financing conditions for some borrowers across the Middle East.

The seven-year maturity would give DAE a longer repayment horizon than conventional short-term working capital facilities. Such arrangements can support ongoing corporate funding requirements while spreading contractual repayment obligations across several years.

The proposed dual-currency structure would also expose the borrower to two separate interest benchmarks. SOFR is widely used for dollar lending, while EIBOR serves as a reference for dirham-denominated financing. Both margins are expressed in basis points, with 100 basis points equivalent to one percentage point.

The financing proposal follows a substantial expansion of DAE’s borrowing arrangements during 2026. The company announced in March that it had signed $2.8 billion of unsecured revolving credit facilities, replacing an existing $1.4 billion arrangement and extending the maturity of those facilities to March 2031.

Those agreements increased its revolving credit capacity to approximately $4 billion. They comprised $2.3 billion of conventional financing and $500 million of Sharia-compliant liquidity commitments from 15 international financial institutions.

Emirates NBD and First Abu Dhabi Bank were initial mandated lead arrangers for the conventional component, while Abu Dhabi Islamic Bank arranged the Sharia-compliant portion. The arrangements demonstrated DAE’s established relationships with domestic and international lenders.

The proposed $2.1 billion borrowing is separate from those previously announced facilities. Its precise relationship with the company’s existing debt portfolio, including whether any proceeds might replace outstanding obligations, has not been specified.

DAE’s financing requirements also follow the expansion of its aircraft leasing portfolio. The company completed its acquisition of Macquarie AirFinance in July, a transaction valued at approximately $9 billion that substantially increased the scale of its leasing operations.

The enlarged business requires access to funding for aircraft ownership, lease management and associated corporate obligations. However, the proposed loan has been described as financing for general working capital rather than funding earmarked for a particular aircraft acquisition.

DAE’s published financial disclosures provide a measure of its existing borrowing capacity. At March 31, the company reported available liquidity of $4.55 billion, compared with $3.4 billion at the end of December 2025.

Net loans and borrowings stood at approximately $9.95 billion at the end of March, down from $10.23 billion three months earlier. Unsecured borrowing represented 88.5 per cent of its debt portfolio.

First-quarter revenue increased 15 per cent to $455.5 million, while profit before tax rose 19 per cent to $120.4 million. Operating cash flow amounted to $296.3 million, compared with $344.7 million a year earlier.

DAE operates through two principal divisions, DAE Capital and DAE Engineering. The leasing division manages aircraft investments and airline leasing relationships, while the engineering business provides aircraft maintenance, repair and overhaul services.

Its engineering operations are centred on facilities in Amman, Jordan, serving airlines across the Middle East and other international markets. The company maintains corporate offices in Dubai and several overseas aviation centres.

China Construction Bank has an established lending relationship with DAE. The two parties agreed a $420 million unsecured five-year term loan in March 2024, intended to support the company’s future financing requirements.

The latest proposed transaction would involve a wider syndicate of lenders, with institutions from China, Singapore and the UAE participating in the arrangement. No definitive signing date or individual lender commitments have been publicly announced.

DAE has scheduled its next financial results presentation for November 10, covering the nine months ended September 30, 2026.