Emirates Launches DH 750 Million Bond Issue

The Chairman of Emirates, HH Sheikh Ahmed Bin Saeed Al-Maktoum, has announced the launch of a Dh 750 million (US$205.4 million) bond to be listed on the Dubai Financial Market (DFM). Emirates is the first corporation in the UAE to raise finance directly from investors in this way.

The Emirates Bond issue is being arranged by HSBC Financial Services (Middle East) Limited and the National Bank of Abu Dhabi. It is being lead managed and underwritten by HSBC Bank Middle East, National Bank of Abu Dhabi, Emirates Bank Group and the National Bank of Dubai.

With a minimum subscription of Dh 5 million (US$1.3 million), the bond will have a term of five years with interest paid semi-annually. It is the largest dirham-denominated bond to be issued to date, and the first to be listed on the DFM.

Sheikh Ahmed said: "We have launched the bond issue in response to demand from the investment community in the UAE. It offers investors the opportunity to be associated with the future growth of Emirates. We are delighted that our issue will be the first such listing on the Dubai Financial Market and that it marks an historic development for the financial markets in the UAE."

Sheikh Ahmed continued: "There is always a need to widen our funding base and develop a number of different financing resources as we gear up for future expansion. The launch of this bond represents an important diversification of funding for Emirates."

The bond is in the form of a Floating Rate Note (FRN) issue in an aggregate principal amount of Dh 750 million (US$205.4 million). It will have a maturity of five years and will pay interest semi-annually at a rate of 70 basis points over six-month EBOR (Emirates InterBank Offered Rate), which will be reset every six months.

The issue will be cleared and settled through (as well as listed on) the DFM. During the primary distribution period, the minimum investment amount will be Dh5 million (US$1.3 million), but, thereafter, investors will be able to trade the FRNs in multiples of Dh100,000 (US$27,400) via exchange brokers.

David Moleshead, Director Investment Banking, HSBC Financial Services (Middle East) Limited, said "This is a landmark in the development of the UAE financial market, and we are therefore delighted to be associated with such an important transaction with our long standing and prestigious client".

Terence D. Allen, Head of Treasury & Investment Banking Division, National Bank of Abu Dhabi, said "We have a strong record of success with the first two dirham bonds for overseas issuers and are proud to be arranging the first dirham bond for a domestic issuer. We are committed to developing the capital and debt markets in the UAE, so as to expand the financing options available to quality UAE corporates."

NOTES

Emirates

In the financial year April 1st 2000 to March 31st 2001, Emirates carried more than 5.7 million passengers and 335 million kilos of cargo and achieved record revenues of over DH 6.1 billion and profits before dividend of over DH 421 million.

It is one of the fastest growing major international airline in the world and has won many awards, most recently the SkyTrax Airline of the Year award and the Air Cargo News Cargo Airline of the Year.

Dubai Financial Market

Established in March 2000, Dubai Financial Market (DFM) strives to create a fair, efficient and transparent market place that serves the interest of the national economy. Equipped with state of the art systems and technology, DFM provides maximum liquidity in securities trading through the interaction of supply and demand to determine fair pricing of securities, while protecting investors against unfair and improper practices.

HSBC Financial Services (Middle East) Limited

HSBC Financial Services (Middle East) Limited is an associate company of HSBC Bank Middle East, and benefits from access to the HSBC Group's extensive investment banking capabilities. Specialist areas include capital markets, project and export finance, corporate finance, private banking, Islamic banking and equity brokerage.

HSBC Bank Middle East

HSBC Bank Middle East is the largest and most widely represented international bank in the Middle East with 31 branches throughout the United Arab Emirates, Oman, Bahrain, Qatar, Jordan, Lebanon and the Palestinian Autonomous Areas including an offshore banking unit in Bahrain. This extensive regional coverage is enhanced by HSBC Group's subsidiary HSBC Bank Egypt SAE and associate companies, the Saudi British Bank, and the British Arab Commercial Bank. In addition to its Middle Eastern network, the Bank has branches in Baku, Azerbaijan and in London, UK. It also has a representative office in Tehran, Iran.

HSBC Holdings plc

HSBC Bank Middle East is a principal member of the HSBC Group which, with more than 6,500 offices in 79 countries and territories and assets of USD 674 billion at 31 December 2000, is one of the world's largest banking and financial services organizations.

National Bank of Abu Dhabi

Investment Banking National Bank of Abu Dhabi's Investment Banking arm (NBAD - IB) is the leading locally owned investment bank in the UAE. With over fifty professionals, NBAD - IB provides investors and issuers with value-added services across the entire spectrum of investment banking services, including corporate finance advice, arranging debt/capital raising for corporations, international securities trading services and private placements. It has pioneered the dirham-denominated bond market and was the first local institution to launch a series of principal protected bonds with different underlying indices.

National Bank of Abu Dhabi, PJSC National Bank of Abu Dhabi is the largest banking institution in the country with 52 branches and cash offices and 86 ATMs nationwide serving every segment of the client base. NBAD was awarded both the Euromoney and Global Finance awards for the Best Domestic Bank in the UAE in 2000. More recently it received the Sheikh Khalifa Excellence Award for Best Bank.