* To issue via unit holding stakes in global partners -sources
* Close to mandating Goldman, NBAD among others
* Deal likely before end-Sept (Adds details, context)
By Archana Narayanan and Stanley Carvalho
DUBAI/ABU DHABI, June 14 (Reuters) - Etihad Airways is intalks with potential investors, seeking to raise around $1billion through a debut bond issue, sources aware of the mattertold Reuters on Sunday.
The Abu Dhabi government-owned airline is planning to launchits bond through a unit or special purpose vehicle housing itsequity stakes in global airlines, two Gulf-based sources awareof the matter said.
It will use the proceeds to lend to its global partners,fund its own expansion plans and partly for general purposes,one source said. It owns stakes in Alitalia, VirginAustralia, Air Berlin, and India's Jet Airways, among others.
The airline also expects to take delivery of 16 aircraft in2015, it said in May, purchases which will cost hundreds ofmillions of dollars.
Unlike Dubai-based rival Emirates, Etihad hasbased part of its expansion on investing in other carriers,which has helped it boost revenues and marketing opportunitiesin key markets.
Etihad declined to comment. The sources spoke on conditionof anonymity as the information is not yet public.
Unlisted Etihad is in advanced talks with Goldman Sachs and National Bank of Abu Dhabi to enlist themas lead arrangers for the transaction, two separate sourcessaid, adding they are expected to be joined by boutique firmsADS Securities and Anoa Capital on the deal.
HSBC may also join as an arranger of thetransaction, which is likely to happen before the end of thethird quarter, one of the sources added.
"Talks are in the exploratory stage, and the company mightissue a highly structured bond," said one of the Gulf-basedsources, adding the bonds are likely to be junk rated as theywill not be guaranteed by Etihad.
Structured bonds are securities with one or more specialfeatures, such as with the use of derivatives like options andto a lesser extent swaps, but which features protection ofprincipal if held to maturity.
The potential fundraising comes at a time of intenseinterest in Etihad's finances, amid allegations by U.S. airlinesthat Gulf carriers have received more than $40 billion ingovernment subsidies, which the Gulf airlines including Etihadhave denied.
Etihad secured a first-time "A" rating by rating agencyFitch in June, while the term "junk" is reserved for all bondsbelow BBB- by the agency -- a minimum of four notches lower.
Etihad has traditionally funded itself with cash from localand international banks, export credit agencies as well as leasefinancing.
Last year, the company said it would raise $2 billion inloans to fund its equity investments and aircraft purchases. (Editing by David French and Susan Thomas)