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Guernsey In Aircraft Investment Company First

Thursday, January 13, 2011

Guernsey Finance – the promotional agency on behalf of Guernsey's financial services industry – has noted the listing on the London Stock Exchange of a new Guernsey company offering investment in an A380 aircraft operated by Emirates airline.

The company’s investment objective is to provide investors with income and capital returns through a partial investment in the asset.

Doric Nimrod Air One has been established by London-based financial advisers, Nimrod Capital and Doric Asset Finance, a Frankfurt-based aircraft leasing group that specializes in financing A380s.

Doric has arranged similar investment vehicles in Germany for some of the eight other A380s it has financed for Emirates and Singapore Airlines, since the aircraft's launch in October 2007. However, these were unquoted private partnerships and in an article on December 31, 2010, the Financial Times remarked that the new company is thought to be the first to be listed on a regulated stock exchange, such as the LSE.

The new Guernsey-incorporated entity is listed on the LSE’s Specialist Fund Market (SFM) and also the Channel Islands Stock Exchange (CISX). It has Herbert Smith in London and Mourant Ozannes in Guernsey as legal advisers and is being administered in Guernsey by Anson Fund Managers Limited.

Peter Niven, the Chief Executive of Guernsey Finance, said:

“It is extremely pleasing to see that once again Guernsey is home to another ‘first’ in the investment sector. The island’s infrastructure and expertise means that we are increasingly recognised as the domicile of choice for the structuring and administration of companies investing in the widest range of asset classes. The listing of this niche vehicle on both the SFM and CISX will only add to Guernsey’s reputation as a tried and tested route for launching specialized investment companies.”

Shortly after its admission to the SFM and to the CISX, Doric Nimrod Air One Limited used the proceeds of its placing in conjunction with capital from Australia’s Westpac Bank to acquire the A380 aircraft valued at USD180m (GBP114m) and subsequently leased the aircraft to Emirates for 12 years.

Doric Nimrod Air One aims to return 2.25 pence per GBP1 share per quarter to investors, which the backers say will amount to compounded annualized yield of about 9%. When the lease expires, the company will have the option to sell the aircraft and pay investors out from its residual value.