Emirates Airlines’ Bonds Rise on Tourism Increase, Oil Drop: Arab Credit - Bloomberg

Emirates airlines’ notes have risen in the past month, regaining an advantage they enjoyed over Dubai’s sovereign bonds as the world’s biggest international carrier benefits from rising tourism and falling oil prices.

The extra yield investors demand to hold Dubai government’s 6.7 percent bond due 2015 over the Emirates’ note widened to 16 basis points yesterday from a discount of 22 basis points on Aug. 4, according to data compiled by Bloomberg. The yield on the Dubai-owned airline’s 5.125 percent bond due 2016 fell 21 basis points, or 0.21 of a percentage point, to 5.28 percent yesterday since reaching a record 5.49 percent on Aug. 11.

“The fundamental drivers for Emirates have improved,” Ahmad Alanani, the Dubai-based head of fixed-income sales for the Middle East at investment bank Exotix Ltd., said in an interview. “The number of travelers going through Dubai Airport have hit a record high” and oil prices have dropped, he said.

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