Dubai Emirates airline announced today that it has repaid a US$ 550 million Islamic sukuk bond in full on its maturity date 18 June, 2012.  The sukuk bond, listed on the Luxembourg Stock Exchange, was originally issued in 2005 with a seven year term. The US$ 550 million Islamic sukuk bond was the first of its kind to be issued by Emirates.

Sheikh Ahmed bin Saeed Al Maktoum, Emirates Airline and Group's chairman and chief executive, said, “The repayment of our first ever sukuk bond is part of Emirates’ varied financing strategy and reflects our robust financial position.

“Our consistent profitability and sound business model continue to ensure that we receive sufficient offers of financing to support our long term growth.

“With the Eurozone debt crisis on-going it is likely that Islamic financing, with its large pool of liquidity, will play an increasingly important role for us moving forward.” 

Emirates utilizes a a variety of financing tools, including, operating leases, EU/US export credits, commercial asset-backed debt, Islamic financing, Conventional bonds as well as Islamic Sukuks.

Sukuk (Arabic: صكوك‎, plural of صك Sakk, "legal instrument, deed, check") is the Arabic name for financial certificates, but commonly refers to the Islamic equivalent of bonds. Since fixed income, interest bearing bonds are not permissible in Islam, sukuk securities are structured to comply with the Islamic law and its investment principles, which prohibits the charging, or paying of interest. Financial assets that comply with the Islamic law can be classified in accordance with their tradability and non-tradability in the secondary markets.

Most commonly used sukuk structures replicate the cash flows of conventional bonds. Such structures are listed on exchanges, commonly Luxembourg Stock Exchange (in the case of Emirates Airlines) and London Stock Exchange in Europe, and made tradable through conventional organisations like Euroclear or Clearstream.