DAE Lines Up Seven-Year Dollar Bond Sale

(MENAFN- The Arabian Post) Dubai Aerospace Enterprise Ltd has moved to the international debt markets with plans for a benchmark-sized, dollar-denominated Regulation S senior unsecured bond with a seven-year tenor, as the aircraft leasing and aviation services group looks to extend its maturity profile amid steady demand for high-quality aviation credit.

The proposed notes will be issued through DAE Funding LLC under the company's Global Medium Term Note Programme and are expected to carry ratings of Baa2 from Moody's Investors Service and BBB from Fitch Ratings. The parent company is currently rated Baa2 with a stable outlook by Moody's and BBB with a stable outlook by Fitch, positioning the offering firmly within the lower investment-grade category.

Mandates for the transaction indicate a broad syndicate of international and regional banks, reflecting DAE's strategy of maintaining deep access to global capital markets. Abu Dhabi Commercial Bank, Bank of China, BNP Paribas, Goldman Sachs International and Mizuho have been appointed as joint active bookrunners. They are being joined by Bank ABC, Crédit Agricole CIB, Emirates NBD Capital, Fifth Third Securities, First Abu Dhabi Bank, HSBC, JP Morgan, Morgan Stanley, Natixis and Truist as joint passive bookrunners, with RAKBANK acting as co-manager.

Market participants view the breadth of the syndicate as a signal of issuer confidence and an attempt to maximise distribution across Asia, Europe, the Middle East and the United States. The inclusion of both global investment banks and regional lenders also underlines the company's dual focus on international institutional investors and Middle East-based accounts that are familiar with the issuer's credit profile.

Seven-year DAE bond targets global investors

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DAE, owned by the Investment Corporation of Dubai, has built one of the world's larger aircraft leasing platforms, with a fleet comprising hundreds of owned, managed and committed aircraft leased to airlines across multiple jurisdictions. Its business model, combining leasing, asset management and technical services, has helped it generate predictable cash flows that are closely watched by bond investors assessing aviation exposure.

The decision to opt for a seven-year maturity aligns with a wider trend among aircraft lessors to smooth debt repayment schedules while locking in fixed-rate funding. Industry analysts note that leasing companies have been balancing near-term refinancing needs with longer-dated issuance to mitigate interest rate volatility and maintain liquidity buffers. For DAE, the proposed bond would sit alongside a mix of bank facilities, secured financings and previous capital market transactions.

Credit analysts typically point to DAE's diversified airline customer base, long average lease terms and conservative liquidity management as strengths supporting its investment-grade ratings. At the same time, the aviation leasing sector remains sensitive to airline credit quality, geopolitical risks affecting air travel, and aircraft supply dynamics linked to manufacturing backlogs and engine availability. Rating agencies have highlighted these structural risks even as they maintain stable outlooks for established lessors with scale and access to funding.

The use of a Regulation S format suggests the notes will be targeted primarily at investors outside the United States, a common approach for Middle East-based issuers seeking efficient access to offshore dollar liquidity. Benchmark-sized issuance usually implies a transaction large enough to ensure secondary market liquidity, a feature that appeals to institutional investors such as asset managers, insurers and pension funds.

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Syndicate bankers involved in aviation finance say demand for investment-grade leasing credits has been supported by the sector's role in global aircraft supply chains, particularly at a time when airlines are reliant on lessors to bridge delivery delays from manufacturers. Lessors with strong balance sheets have been able to place aircraft at favourable lease rates, reinforcing revenue visibility that feeds into credit assessments.

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