FlyDubai, the Dubai government-owned budget carrier, raised $500 million from its debut bond sale, according to three people with knowledge of the deal.

The five-year sukuk will be priced to yield 200 basis points, or 2 percentage points, above the benchmark midswap rate, said the people, asking not to be identified because the information is private. The price was cut from a guidance of about 225 basis points above midswaps, according to the people.

Carriers in the United Arab Emirates, also home to Emirates and Etihad Airways, are raising money to pay for planes as tourism and trade expand. Emirates secured a 1.1 billion-dirham ($299 million) from a group of lenders led by First Gulf Bank PJSC. Sharjah-based low-cost carrier Air Arabia PJSC obtained $230 million from Dubai Islamic Bank PJSC to fund the purchase of six Airbus A320s next year.

FlyDubai Chief Executive Officer Ghaith Al-Ghaith said in October the carrier would take delivery of 15 planes by the end of the year. The airline is targeting flights to secondary airports in India as an inter-governmental agreement grants it greater access to a country that supplies millions of migrant workers to the Gulf, he said in an interview in June.

Credit Agricole CIB, Dubai Islamic Bank, Emirates NBD Capital Ltd., HSBC Holdings Plc, National Bank of Abu Dhabi PJSC, Noor Bank, Standard Chartered Plc arranged FlyDubai’s bond sale.

To contact the reporter on this story: Arif Sharif in Dubai at asharif2@bloomberg.net To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net Dana El Baltaji, Shaji Mathew.

Photo Credit: Flydubai lines up for take off at Hazrat Shahjalal International Airport. Faisal Akram / Flickr