The planes have been delivered to Emirates Airlines in June and November 2012.
The bank had previously acquired in 2007 a Boeing 777-200ER on lease to the Malaysian Airlines.
On this occasion, Talal Abdul Aziz Al Mulla, Acting Head of Investment, pointed out that “this is a unique investment opportunity with a high quality asset and a financially strong lessee,” adding that “this investment comes in line with the Bank’s strategy in providing opportunities producing regular income and continuous cash returns.”
For his part, Anwar Murad, Head of Private Banking, stated that, “This is the third investment opportunity in the aviation sector that has been offered to Al Salam Bank accredited investors. The investment offers an attractive yield of nine per cent p.a. and is a good tool to diversify investors’ income stream,” adding that “both opportunities were remarkably oversubscribed by GCC investors. This reflects the level of trust in Al Salam Bank’s investments and the overall banking industry in the Kingdom of Bahrain.”
The Boeing 777-300ER is considered one of the most popular amongst the B777 family with backlog of orders exceeding 270 aircrafts. There are approximately 28 operators of this type of aircraft.
The aircraft is on long term lease to Emirates thus providing an opportunity for investors to benefit from a regular income stream secured by a top tier airline. Emirates airlines has recently published its results for the year ended March 2012 generating revenues of circa $17 billion, an increase of 15 per cent from the previous year. The latest financial results marked a remarkable 24th consecutive year of profitability.
Al Salam Bank -Bahrain has identified this opportunity and successfully concluded the transaction despite the challenging global economic conditions. In line with the investment strategy, the Bank retained a sizeable stake of the investment in the proprietary portfolio and sold down the remaining portion to its investors who have shown great interest in the transaction.
Novus Aviation is acting as the lease and Aircraft manager, International Bureau of Aviation acted as the technical advisor, and Clifford Chance Middle East provided legal advice on the transaction.