Emirates Airline: A Billion-dollar Sukuk-Bond Issue Harvard Case Solution & Analysis

Emirates Airline (EA) needs to fund the purchase of 30 new A380 aircraft. On March 11, 2013, EA announced plans to issue US$1 billion of Islamic bonds (sukuk) and $750 million of routine bonds. These bonds arguably share similar risks and seniority even though the sukuk bonds sold with a lower implied yield.

This variation in pricing for securities with similar default hazards appears at odds with classic funding thinking. As a backdrop, the EA treasury department must evaluate decision on the appropriate financing for this next batch of planes that are A380. Authors Emir Hrnjic and David Reeb are affiliated with all the National University of Singapore.

PUBLICATION DATE: April 08, 2014 PRODUCT #: W14084-HCB-ENG

This is just an excerpt. This case is about FINANCE & ACCOUNTING

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Emirates Airline: A Billion-dollar Sukuk-Bond Issue

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