UK Export Finance is the operating name of the UK government's export credits guarantee department. It provides insurance to exporters, and guarantees to banks to share the risk of providing export finance, as well as making loans to overseas buyers of UK goods and services, according to its website.
Reuters quoted "five sources familiar with the matter" who said that Emirates has hired banks to help it arrange the sukuk, as part of plans to finance future aircraft orders.
Emirates is a major customer for the Airbus A380, whose wings are assembled in Wales. Around 100,000 jobs are generated in the UK by Airbus wing work, Airbus said on its website, "both directly as well as indirectly through an extended supply chain of over 400 companies".
Emirates has not commented on the report, and Lynda Hardy Maskell, spokesperson for UKEF, said: "I’m afraid we aren’t able to comment on any transaction until it is completed".
However, the UK finance ministry said in October last year that UKEF would guarantee a sukuk bond for the first time in 2015, and that it would be issued by an Airbus customer, Reuters reported at the time.
Two of Reuters' sources said the Emirates deal could close by the end of March 2015. The transaction is worth up to $1 billion, three sources said, while two said the lifetime of the bond would be between five and 10 years.
Emirates is looking to fund around $107.5 billion of aircraft in coming years, Reuters said, and has previously used bonds backed by export agencies. In 2012, it raised a bond guaranteed by US bank Ex-Im to buy Boeing planes, and in 2013 it refinanced two planes through a bond backed by French export agency COFACE.
It sold a sukuk worth $1 billion in March 2013, Reuters said.
Eight banks are said to be arranging the transaction: HSBC, Citigroup, JP Morgan , National Bank of Abu Dhabi, Dubai Islamic Bank, Abu Dhabi Islamic Bank, Emirates NBD and Standard Chartered. HSBC, NBAD and Standard Chartered worked on the UK government sukuk, along with Qatar's Barwa Bank and Malaysia's CIMB, Reuters said.