Etihad and Abu Dhabi likely to reject bondholder complaints - sources

Etihad Airways and Abu Dhabi's Department of Finance are likely to reject calls for a meeting with disgruntled bond investors in the belief that their complaints have no legal merit, sources close to the matter said. In 2015 and 2016 Etihad issued US$1.2b in bonds in a partnership with airlines it partly owned at the time, including Alitalia and Air Berlin. The bonds are now in default because the airlines, which are now insolvent, have not honoured their part of the obligations. The sources said that a group of international institutional creditors have complained to Etihad and the Abu Dhabi Department of Finance that, when the bonds were marketed, Etihad had promised to support the other airlines to make them profitable. “By definition, that means it would have supported the airlines to cover their debt obligations,” one of the sources said. <br/>