Four Airbus SAS A380 passenger jets being leased to Emirates Airline are the first of their kind to be used as collateral in a U.S. corporate bond offering, according to a person familiar with the transaction.
Doric Nimrod Air Finance Alpha Ltd., a leasing company, sold $587.5 million of debt secured by four A380s to be operated by Dubai-based Emirates, according to data compiled by Bloomberg. The two-part offering was the first sale of dollar- denominated bonds backed by a non-U.S. airline’s planes, said the person, who wasn’t authorized to discuss the deal publicly.
Emirates is the biggest customer for the A380, the world’s largest passenger aircraft. With just 75 in service, investors needed reassurance that the plane will be valuable collateral in case of a default, said Mark Lapidus, managing director of Doric Asset Finance Ltd., the issuer’s London-based parent.
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