MANAMA: In the third investment of its kind, Al Salam Bank Bahrain has acquired an equity stake in a second Boeing 777-300ER on a 12-year-long renewable term lease to the Emirates Airlines.
The bank had acquired in 2007 a Boeing 777-200ER on lease to the Malaysian Airlines.
"This is a unique investment opportunity with a high quality asset and a financially strong lessee," said acting head of investment Talal Al Mulla.
"This investment comes in line with the bank's strategy in providing opportunities producing regular income and continuous cash returns," he added.
"This is the third investment opportunity in the aviation sector that has been offered to Al Salam Bank's accredited investors," said head of private banking Anwar Murad.
"The investment offers an attractive yield of nine per cent a year and is a good tool to diversify investors' income stream.
"Both opportunities were remarkably oversubscribed by GCC investors," he said.
"This reflects the level of trust in Al Salam Bank's investments and the overall banking industry in Bahrain," he added.
The aircraft is on long-term lease to Emirates thus providing an opportunity for investors to benefit from a regular income stream secured by a top tier airline, the bank said.
Al Salam Bank Bahrain has identified this opportunity and successfully concluded the transaction despite the challenging global economic conditions.
In line with the investment strategy, the bank retained a sizeable stake of the investment in proprietary portfolio and sold down the remaining portion to its investors, who have shown great interest in the transaction.
Novus Aviation is acting as the lease and aircraft manager, International Bureau of Aviation acted as the technical adviser and Clifford Chance Middle East provided legal advice on the transaction.