CONFIDENTIAL

January2018

AviationFinanceandLeasinginADGM

2

Introduction

Ø MartinTidestromAbuDhabiGlobalMarket,RegistrationAuthorityBusinessDevelopmentDirector

Ø FarrellSheridanAbuDhabiGlobalMarket,RegistrationAuthorityHeadofStrategicDevelopment

Ø PanelDiscussion§ Moderator:AntonySingle– CliffordChance§ EugeneO’Reilly– SeraphAviationManagement§ JocelynNoel– AirborneCapital§ FarrellSheridan- ADGM

ADGM – Abu Dhabi’s international jurisdiction for business

A broad-based financial and commercial centre, aiming to support growth and diversification of Abu Dhabi’s economy

RA, REGISTRATION AUTHORITY

Business friendly and efficient registration and incorporation of legal entities and real property ADGM

FSRA, REGULATORY AUTHORITY

A risk-based and outcome-focused regulatory philosophy

ADGM COURTS

An independent judicial system that is in line with leading financial centres and based on Common Law

ADGM’sthreeauthoritiesLegalstructure

FEDERALDECREENO.15OF2013EstablishedtheFinancial FreeZone

CABINETRESOLUTIONNO.4OF2013Establ ishedMaryah IslandasADGMJurisdict ion

LAWNO.4OF2013DefinedADGMpowersandstructure

LAWNO.8OF2004ESTABLISHEDFINANCIALFREEZONESINTHEUAE

Ø FullypartoftheUAE

Ø Localcivilandcommerciallawsdis-applied

Ø DirectapplicationofEnglishCommonLaw

Ø Fastandinclusivelegislativeprocess

ADGM’s areas of focus

A broad-based financial and commercial centre, aiming to enhance Abu Dhabi’s attractiveness as a business hub

Ø Assetmanagement

Ø Privatebankingandwealthmanagement

Ø Capitalmarkets

Ø Fintech

Ø Professionalservices

Ø Familybusinessandlegacyplanning

Ø Industryheadquarters,treasuryfunctionsandotherfinancial/corporateactivities

ADGM – overall value proposition

A broad-based financial and commercial centre, aiming to support growth and diversification of Abu Dhabi’s economy

AbuDhabi• WealthcentreoftheUAE• Engineofeconomicgrowth

AtrulyinternationaljurisdictionwithFZbenefits• Evergreenlegalsystem,recognizedandtrusted• Easeofsettingupanddoingbusiness

Abroad,supportiveecosystem• Wealthandassetmanagement,andprovidersofcapital• Widerangeofadvisors• Businesspartnersandstakeholders

Driveandmomentum• Innovation• Strongestgrowthamongregionalfinancialcentres

Existing Thriving Client Community of 650+ Licensed Firms

Wearehometoabroadrangeofleadingglobal businessbrands

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AbuDhabi,TheCapitalCityoftheUAE

Anextraordinarygrowthjourney

1964 2 December 1971 Establishment of the UAE

2007

19961984

2017

of the world’s gas reserves

5%9%of the world’s oil reserves

0.04%of the world’s population

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AbuDhabi,theEconomicPowerhouseoftheUAE

WiththerecentdeclineinoilpriceAbuDhabi’soilGDPhasfallenasaproportionoftotalGDP,howevernon-oilGDPhasalsocontinuedtoriseannually

MainEconomicIndicators&Facts

ITEM 2016

GDP (nominal) US$ 198 billion

GDP per Capita US$ 68,000 (4th highest in the world)

Oil GDP US$ 54 billion (27.5% of GDP)

Non-oil GDP US$ 144 billion (72.5% of GDP)

Inflation rate 1%

Average Annual Growth Rate (2001 – 2016) 10.0%

AAStandard&Poor’s

AAFitch

Aa2Moody’s

AbuDhabi’sinvestmentgraderatingaffirmedbymajoragencies

87%UAE

Land Area

57%Total UAE

GDP

Source:SCAD

UAEoilcostofproduction

$12

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AbuDhabiisbuildingfromFinancialStrength

Highconcentrationofprivateandfamily

wealth

Centreofsovereignwealth

2nd globally

Someoftheworld’smosthighlycapitalised

banks

Highlevelsofinvestorcapital

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AviationisakeypillaroftheAbuDhabiNationalVision2030

Toestablishacompetitive,sustainableandgloballyopeneconomy

• A large empowered private sector• Creation of a sustainable knowledge based economy• A business friendly and transparent regulatory environment• A continuation of strong and diverse international relationships• Premium education, healthcare and infrastructure• Complete international and domestic security

05Themes

2583Goals

Programmes

Economic Development

Security, Justice and Safety

Infrastructure & Environment

SocialDevelopment

GovernmentAffairs

ONGOING PROJECTS

SECTOR BUDGET IN US$ BILLIONS

OVERALL PLANNED SPENDING

Construction 30More than

US$100 billionOil & Gas 25Transport 20Industrial, power and water 6

Source: thenational.ae

UAEAviationStory

1985 1998 2003 2006 2009 2010 2011

Emiratesairlinelaunchedwith$10minstart-upcapitalAndtwoaircraftonwet-leasefromPakistanInternationalAirlines

Waha Capitalestablishedtoinvestinasset-financingforaircraft,shipsandotherhighvalueassets

DubaiInternationalAirportbeginsitsexpansionprocess

DubaiAerospaceEnterprise(DAE)launched

EtihadAirwayslaunched

AirArabialaunched

FlyDubailaunched AbuDhabiairport

becomesoneofthefewlocationsintheworldtoofferUSpre-clearancefacilities

1997 2013 2016

Waha Capitalexchangeportfolioofassetsfor20%equityinAercaptobecomelargestshareholder

Emiratesplacethelargestaircraftorderever– 200airplanesestimatedatUSD$99Billion

GECapitalagreeJointVenturewithMubadalaforcooperationinvariousaerospaceactivities,includingaircraftleasing

ADGMstructuresitsfirstaircrafttransactionandannouncesplanstobecomearegionalhubforaircraftleasingandfinancingactivity

DubaiAlMaktoumInternationalAirportopened–planneddevelopmentwillcreateworld’sbusiestairport

MubadalaestablishSanad(aircraftenginesandcomponentslessorinAbuDhabi)

MubadalaestablishStrata(aircraftcomponentmanufacturinginAbuDhabi)

TheMiddleEastRegionPresentsanEnormousOpportunityinAviation

Source:BoeingCurrentMarketOutlook2017

q PowerfulHubAggregationq DiverseBusinessStrategies

ü Alliancesü Equity&CodeSharesü OrganicGrowth

q RegionalCrossroads

MiddleEastAviationGrowthFactors

GrowthMeasures(%)

Economy (GDP) 3.5

Traffic(RPK) 5.6

AirplaneFleet 5.1

MarketSize

Deliveries 3,350

MarketValue(Bn) $730

AverageValue(Mn) $220

430980240

640630

2,050

50

50

80

180

2016 2036

MiddleEastAircraftFleet

3,900

1,430

3,350newaircraft2016- 2036

173% 25%

16%53%

1%5%

MiddleEastDeliveryUnits

Scaleoflocalandregionalaviationactivitysuggestsclearopportunitiesinaviationfinance

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NearProximitytoManyAviation‘Mega-Cities’

AbuDhabiisproximatetosevencurrentaviation‘mega-cities’.Fourmorewillemergeby2026andafurthersevenby2036

DohaDubai

Abu Dhabi

Dhaka

Colombo

Kuwait

Istanbul

Jeddah

Delhi

Mumbai

Addis Ababa

Riyadh

Tehran

Muscat

Bahrain

Amman

Chennai

Nairobi

Current Mega-Cities

Mega-City by 2026

Mega-City by 2036

Note:Airbusdefineamega-cityasacitywithmorethan10,000dailylong-haulpassengers(morethan2000miles,excludingdomestictraffic)

Top100SKYTRAXAirlinesWithcloseproximitytoAbuDhabi

Source:AirbusGlobalForecast2017

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Aviationopportunitiesonaglobalscale

AbuDhabiiscentrallylocatedbetweenthethreehighestforecastaviationgrowthregionsoverthenexttwentyyears

Source:AirbusGlobalForecast2017

FleetinServicebyRegion2017- 2036

Asia+175%

Africa+149%

Middle East+166%

Latin America+104%

North America+40%

CIS+105%

Europe+70%

ExtensiveDoubleTaxTreatyNetwork

q PWCcompletedanalysisintosuitabilityofUAEtreatynetworkforthepurposesofaircrafttransactionsincomparisontotheexistingaircraftfinanceandleasinghubs,withpositiveresultsseen

q ParticularcomparativestrengthsseeninhighgrowthmarketsofMiddleEast,AsiaandAfricaq IssuanceofTaxResidencyCertificatesubjecttoMinistryofFinancesubstancerequirements

According to Tax Notes database of in-force treaties as of 28 February 2017, subject to change.

Key:n – In Forcen – In Force (applies to gov’t investments only) n – Pending n – Signed but not yet ratified n – Shipping and air transport tax treaty

North America2

In force

South America3

In force

Europe 36In force

Africa9

In force

Asia17

In force

Oceania2

In forceCentral America

2In force

Central Asia6

In force

Middle East5

In force

Caribbean1

In force

83taxtreatiesinforcewithafurther32pending

Seefullreportformoredetails

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IsADGMsuitabletobeanaviationfinancehub?

CriticalSuccessFactors

Typicalsecuritypackageavailable

• Sharepledge,aircraftmortgage,accountchangeandsecurityassignmentavailable7 ✓

Taxefficientjurisdiction • 0%CorporateTaxholidayfor50yearsforallcorporateentities• Extensivenetworkofdoubletaxationtreaties2 ✓

Locallegaladvisors • SeveralinternationallawfirmsalreadypresentinADGMwithextensivespecialistaviationfinancecapability9 ✓

Insolvencyregulations • ADGMhasrobustinsolvencyregulationsbasedonEnglishCompaniesLaw3 ✓

CourtsforSettlingofLegalDisputes

• ADGMhasindependentcourtschairedbyleadingcommonlawjudges• FinalEnglishcourtjudgementsenforceable10 ✓

FitforpurposeSPVregime • ADGMhasacompetitiveandwidelyusedSPVregime• Costsandease-of-processbenchmarkedagainstleadingjurisdictions4 ✓

CommonLawlegalenvironment

• ADGMoffersfullincorporationofEnglishCommonLaw1 ✓

CapeTownConvention • UAEisasignatorytotheCapeTownConvention• ADGMconfirmedapplicationofCapeTownConventionwithinitsownregulations8 ✓

Trustsrecognised • ADGMTrustregimebasedonEnglishTrustLaw5 ✓Setupofbankruptcyremoteorphancompaniespossible

• ADGMplatformallowsfororphancompanysetup• Canbesetupandmanagedbyacorporateservicesprovider6 ✓

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BuildingaBroadAviationFinanceCommunity

ADGMprovidestheidealplatformforoperationalbusinessesacrosstheaviationfinanceecosystem,aswellastherequisitelegalstructuresforefficientstructuringandfinancingofaircrafttransactions

Lessors

LawFirms

Banks

AssetManagersFundManagers

SpecialPurposeVehicles

TrustsAdvisoryfirms

FundStructures

OperationalBusinesses

RemarketersAppraisers Bond/SukukStructures

LegalStructures

*Non-exhaustivelist

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Summary- EstablishingaRegionalOperationinADGM

q Beclosertolocalandregionalclientsandbusinessopportunities

q Centrallocationtotheworld’sfastestgrowingaviationmarkets

q Tapintothelargevolumesoflocalinvestorcapital

q Taxefficientandbusinessfriendlyoperatingenvironment

q Englishlawrecognisedasgoverninglaw

q Extensivedoubletaxtreatynetwork

q Requisitestructuresandlegalvehicles

ComplementyourexistingofferingwithaMiddleEastregionalpresence

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