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Emirates Announces 2004 Eurobond Issue

Emirates Announces 2004 Eurobond Issue

Emirates, the Dubai-based international airline, today announced that it plans to launch an international bond issue in 2004. It will be denominated in US dollars, for an initial amount of US$400 million. It will have a maturity of seven years and will offer investors a floating-rate interest.

His Highness Sheikh Ahmed bin Saeed Al-Maktoum, Chairman of Emirates, said: "We have taken formal steps to issue this inaugural international bond early in the New Year. This will be the first time that Emirates will have a bond issue listed outside Dubai."

Sheikh Ahmed disclosed that Emirates is preparing for the bond initially to be listed in Luxembourg. Later it will be listed also on the Dubai International Financial Centre (DIFC) once the Centre becomes operational.

He added: "The bond will be joint-lead managed by HSBC, Emirates Bank International, National Bank of Abu Dhabi and National Bank of Dubai. It is anticipated that other banks will be invited into the deal to join the management group in due course"

The rapidly expanding airline this year added three new destinations to its network including New Zealand, operating three services a day between Auckland and Dubai ? via Sydney, Melbourne and Brisbane. Another six new destinations are scheduled to be added next year.

The 2004 bond issue will represent Emirates' second foray into the bond markets. In June 2001 Emirates issued the first-ever UAE Dirham bond which was closed at AED 1.5 billion due to heavy investor over-subscription within the UAE. This was also the first bond to be listed on the Dubai Financial Markets.

With the new bond issue announced today, Emirates will be aiming to develop an investor base outside the UAE, both within the rest of the Middle East and outside.

Following the earlier UAE Dirham bond issue, the new bond signals Emirates' resolve to assert itself as a pioneering GCC institution in the debt capital markets. This US dollar-denominated bond will be the first-ever international issue by a GCC-based corporation.

According to Sheikh Ahmed, "The purpose of the bond issue is to raise funds for general corporate finance purposes. Emirates has a major expansion programme planned for the coming years. Against this background we have taken the strategic decision to open up alternative sources of finance and investment."

The new US dollar bond issue is intended to introduce Emirates to new classes of investors who might be attracted to other Emirates bonds in the future, should they be launched.

Emirates also indicated that the new securities have not been, and will not be registered under the United States Securities Act of 1933 (the "Securities Act".) They may not be offered or sold within the United States or to, or for the account or benefit of United States persons, except pursuant to an exemption from, or a transaction not subject to, the registration requirements of the Securities Act.

The bond will be subject to the stabilisation rules of the FSA (Financial Services Authority, U.K.)

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