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Sun 29 May 2011 05:03 PM

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Emirates plans dollar bond sale as ‘cash buffer’

Dubai flagship airline has cash reserves of about AED16bn, says president Tim Clark

Emirates plans dollar bond sale as ‘cash buffer’
President of Emirates Airline, Tim Clark. The carrier posed a record profit of AED1.6bn for 2010
Emirates plans dollar bond sale as ‘cash buffer’
Two Emirates aircraft seen at Dubai airport on the first day of of the 8th Aerospace Expo in Dubai, Sunday, December 7, 2003. General Electric Co. and United Technologies Corp.s Pratt & Whitney won a $1.5 billion contract to supply Emirates airline with engines for Airbus SAS A380 aircraft,\n extending their lead over Rolls-Royce Plc. Photographer:Charles Pertwee/Bloomberg News.
Emirates plans dollar bond sale as ‘cash buffer’
Emirates Airlines chief executive officer Sheikh Ahmed bin Saeed Al Maktoum
Emirates plans dollar bond sale as ‘cash buffer’
Emirates passenger flights to Spain, which begin on August 1, follow in the footsteps of Emirates SkyCargo, which has been operating freighter flights to Spain since 2006. (Photo supplied)

Emirates, the world’s biggest airline by international
traffic, plans to sell dollar bonds as a "cash buffer" and will
decide on the size after investor meetings end tomorrow, its president said.

"With the
obligations we have coming up, it’s nice to have the cash buffer to deal with
anything ahead of us," including an increase in fuel prices and regional
unrest, Tim Clark said in a telephone interview Sunday. "Can we do without
it? Yes, we can. We are in a comfortable position."

Emirates, which
reported record profit of AED5.93bn ($1.6bn) for the financial year ending
March 31, has a cash reserve of AED16bn. The Middle East’s biggest carrier is building
the largest Airbus SAS A380 superjumbo fleet as it seeks to establish Dubai as
an intercontinental travel hub and win passengers from Air France-KLM Group and
Deutsche Lufthansa.

The airline is meeting
fixed-income investors in Asia, the Middle East and Europe, three people with
knowledge of the sale said May 19. The Dubai-based airline hired Deutsche Bank,
Emirates NBD, HSBC Holdings  and Morgan
Stanley as joint lead managers for the sale, and investor meetings end in
Zurich tomorrow, the people said.

"We think it will
be a very attractive proposition for many investors, and we hope they like
us," Clark said.

Emirates’ obligations could include payments on
aircraft deliveries and loans, he said.

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