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ADGM Welcomes Aircraft Financing Deal

by Lorys Charalambous, Lowtax.net, Cyprus
18 January, 2017

Abu Dhabi Global Market, a relatively new low-tax financial center, has welcomed its first aviation finance transaction.

Hoping to establish itself as an aviation financing and asset management hub in the United Arab Emirates and the Middle East and North Africa region, the ADGM recently enacted the Cape Town Convention and Aircraft Protocol 2001 into its insolvency framework. The zone said the regulations are intended to "augment ADGM's strengths as an international jurisdiction for aviation financing and leasing as well as global financial services."

The transaction involved the sale and leaseback of two 2016 vintage Airbus A380 aircraft between Etihad Airways and Natixis, the French corporate and investment bank. Both aircraft are owned by special purpose companies based in ADGM and are leased to Etihad for a period of 12 years.

The transaction also marked Etihad's first operating lease of an Airbus A380, leveraged with a combination of Islamic and conventional tranches of debt arranged by Natixis. As a result of this transaction, Natixis and ADGM are in advanced discussions to set up an aircraft investment platform in ADGM.

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