Airbus A380 delivered to the first UK aircraft investment company

London – The innovative investment company Doric Nimrod Air One Limited (DNA), with the sole purpose of owning and leasing an Airbus A380 aircraft to Emirates, the national airline of Dubai, United Arab Emirates, was listed on Monday, 13th December 2010 on both the London Stock Exchange (LSE) and the Channel Island Stock Exchange (CISX). The Airbus A380 was successfully acquired by DNA last night at 23:59 GMT in Dubai.

The LSE listed company is aimed at offering institutional investors the opportunity to own the Airbus flagship, double-decker A380, fully backed by a 12-year lease arrangement with Emirates. Much like a property deal, the major objective of DNA is to provide investors with an attractive and high yield backed by a solid counterparty and a high quality asset.

At closing yesterday the stock, ticker “DNA”, traded at a premium to its launch price at 110.5 pence.

The aircraft purchase price has been agreed at US$180 million, which divides into US$122 million 12-year fully amortising senior debt and approximately £42.5 million in equity – raised from UK institutional investors.

Under the leasing arrangement, investors are targeted to receive distributions of 2.25 pence per £1 share per quarter, bringing in a compounded annualised yield of around 9 per cent. At the end of the lease the aircraft will be sold and investors paid out from the aircraft’s residual value, which could (on the basis of current appraisals of future values) yield an additional profit on disposal for investors.

The investment company has been created by London-based financial advisors Nimrod Capital LLP, a prominent provider of innovative specialist investment vehicles, which devised the UK-specific listing, and Doric Asset Finance, a leading provider of products and services for investors in the fields of aviation, shipping, renewable energy and real estate with US$4.7 billion in assets under management. Doric has a strong track-record of managing investment vehicles for shared aircraft ownership in Germany, although this is the first such vehicle to be placed into the UK market and to have a listing on a recognised stock exchange.

Commenting on the deal, Mark Lapidus, Managing Director of Doric Asset Finance, said “We are delighted to have structured with Nimrod the first listed aircraft investment company and sourced the equity for the transaction from UK institutional investors. In these times of uncertainty, investors are highly interested in income-generating, real asset-backed transactions, which additionally offer good prospects for capital appreciation as well as a hedge against inflation.”

“This is an innovative investment vehicle,” says Marc Gordon, Partner at Nimrod Capital. “Not only is it the first chance UK investors have had to share ownership of an aircraft, they can do so with the transparency and liquidity of a London Stock Exchange listed company. A 9 per cent return is also attractive for a structure in which the lease payments cover the quarterly dividends and amortise the debt, ensuring the aircraft’s residual value brings the possibility of a further return at the end of the lease. Meanwhile, we have the security of a fully-insured aircraft that, before you ask, uses Engine Alliance engines.”

Herbert Smith acted as legal advisors to the fund and Norton Rose as legal advisors on the leasing transaction. The debt is being provided by Westpac Banking Corporation, advised by Clyde & Co.

Doric is also closing this week a sister transaction for another Emirates A380 aircraft, Sky Cloud II, in the German KG market.

www.nimrodcapital.com
www.doricassetfinance.com

Contacts for press enquiries:

Richard Bolchover, Partner, Nimrod Capital LLP
Email: Richard.Bolchover@nimrodcapital.com | Tel: +44 2033556855

Irena Badelska, Press and Communications, Doric Asset Finance
Email: irena.badelska@doricassetfinance.com | Tel: +44 2076216513