Milbank Advises on Groundbreaking Sharia’h-Compliant Aircraft Portfolio Acquisition and Financing

LONDON, 20^th  September, 2019 — Milbank LLP advised NCB Capital and Dara Aviation Finance Limited (an entity established by NCB Capital) in relation to the acquisition by Dara Aviation Finance Limited of a portfolio of 19 commercial aircraft from AerCap Holdings N.V. and its subsidiaries, comprising a combination of Airbus and Boeing narrow-body and wide-body aircraft that are leased to 17 airlines across the world. 

Part of the financing for the acquisition of the portfolio is provided via a USD500million murabaha facility structured with Citibank and jointly arranged by Citibank and BNP Paribas. The facility is a non-recourse, aircraft-secured revolving warehouse facility and is the first Sharia’h compliant facility of its kind, comprising a number of innovative features. The transaction also involves Sharia’h-compliant hedging arrangements.

AerCap will provide administrative, technical and lease management services in its capacity as servicer of the Portfolio.

Milbank advised on all aspects of the transaction, including the sale agreements, servicing agreements, facility agreement and hedging arrangements, as well as structuring and antitrust and regulatory aspects.

The Milbank team was led by Transportation and Space partner Nick Swinburne, alongside special counsel Richard Walton (Transportation and Space) and associate Tom Jackson (Transportation and Space), with support from Munib Hussain (Global Project, Energy and Infrastructure Finance), James Warbey and Jennifer Ellis (Alternative Investments), Alexander Rinne (Antitrust and Competition) and Josh Forman, Mark Leverkus, Ben Andrews, Harriet Rugg-Easey, Amy Bradley, Olivia Cornelius, Anastasia Katsea and Rena Joerissen (Transportation and Space).

Lead partner Nick Swinburne said: “This complex and ground-breaking transaction again demonstrates Milbank’s position at the cutting edge of aircraft finance.  We are lucky to have clients like NCB Capital who want to do innovative and market-leading deals.  We are pleased to have been able to work with NCB Capital - as well as BNP Paribas, Citi and AerCap - in structuring, documenting and closing the deal and helping ensure a great result for all of the parties.”