DAE reveals early retirement of $488m of 5.25% senior unsecured notes

The notes are scheduled to be redeemed on October 15, 2021

A DAE aircraft. In the past 12 months, DAE has issued new senior unsecured notes with a combined principal amount of $3.3 billion. Photo: Dubai Aerospace Enterprise

Dubai Aerospace Enterprise, the Middle East's biggest plane lessor, said it delivered a notice of early redemption to holders of the company’s $500 million of 5.25 per cent senior notes due in 2021.

The notes are scheduled to be redeemed on October 15, it said in a statement on Tuesday.

The outstanding principal amount of the notes as of the date of the redemption notice was approximately $488m.

"The notes will be redeemed in accordance with the terms and conditions of the applicable indenture at a redemption price equal to 100 per cent of the principal amount of the notes, plus accrued and unpaid interest, if any," DAE said.

Wells Fargo Bank is the trustee and paying agent for the notes.

In the past 12 months, DAE has issued new senior unsecured notes with a combined principal amount of $3.3 billion, with a weighted average maturity of 4.7 years, it said. The aircraft lessor also redeemed or announced for redemption senior unsecured notes with a combined outstanding principal balance of approximately $2.2bn.

Last month, DAE said it was optimistic but vigilant after posting a lower first-half net profit amid a divergent recovery in air traffic demand across markets, the emergence of new Covid-19 strains and the uneven distribution of vaccines.

Net profit for the first six months through to the end of June dropped to $49m, from $121.7m in the same period a year earlier. First-half revenue also fell to $613.4m, from $675.9m a year earlier.

Available liquidity at the end of the first six months of the year climbed to $4.09bn, from $2.69bn a year earlier. Operating cash flow rose to $498.5m from $432.2m for the period while fleet use also improved marginally to 99.1 per cent, the company said at the time.