Emirates hires banks for UK-guaranteed sukuk of up to $1 bln

(In sixth paragraph corrects to Britain's from Britain)

* Airline hires eight banks for possible sukuk - sources

* Issue likely to be worth up to $1 bln - sources

* Sukuk backed by UK Export Finance, first such deal

By Tom Arnold and David French

DUBAI, Feb 19 (Reuters) - Emirates, the Dubai-based airline, has hired banks to help it arrange a sukuk or Islamic bond of up to $1 billion, five sources familiar with the matter said, as the airline seeks to raise cash to finance its pipeline of aircraft orders.

The issue will be backed by UK Export Finance (UKEF), the sources said, the first time Britain's export credit agency has guaranteed an Islamic bond issue.

Spokeswomen for Emirates and UK Export Finance declined comment.

Export credit agencies aim to provide funding to companies outside their countries, on the proviso that the money is used to support home industries.

Emirates is the largest customer for the Airbus A380, for which the wings are assembled at the manufacturer's plant in Broughton, Wales.

UKEF expected to guarantee an Islamic bond in 2015 issued by a customer of Airbus, Britain's finance ministry said in October. This came after the UK became the first Western nation to sell an Islamic bond, attracting bids worth more than 10 times the 200 million pounds ($322 million) on offer.

It will not be the first time Emirates has issued bonds backed by export credit agencies as it seeks to diversify its sources of funding for the delivery of around $107.5 billion worth of aircraft from Boeing (NYSE: BA - news) and Airbus in coming years.

Emirates in 2012 raised a bond which was guaranteed by U.S. Ex-Im Bank to help support the purchase of Boeing aircraft and in 2013 it refinanced two Airbus A380s through a bond backed by COFACE (LSE: 0QVK.L - news) , the French export credit agency.

It also sold a $1 billion sukuk in March 2013.

Two of the sources said the upcoming U.K.-backed Emirates deal could close by the end of the first quarter.

The transaction is likely to be worth up to $1 billion, according to three of the sources, with one adding that the lifespan would be between five and 10 years.

Eight banks are arranging the transaction, according to two of the sources: HSBC, Citigroup (NYSE: C - news) , JP Morgan , National Bank (NYSE: NBHC - news) of Abu Dhabi, Dubai Islamic Bank, Abu Dhabi Islamic Bank, Emirates NBD and Standard Chartered (HKSE: 2888.HK - news) .

Three of the banks, HSBC, NBAD and Standard Chartered, worked on the UK government sukuk, along with Qatar's Barwa Bank and Malaysia's CIMB. (Additional Reporting by Archana Narayanan and Bernardo Vizcaino in Sydney; Editing by Jane Merriman)