The 5.767 percent convertible Islamic notes due in November 2011 from Abu Dhabiâs biggest real-estate developer rose 1.81 cents on the dollar from a 16-month low reached on Aug. 11, cutting the yield to 9.589 percent from 11.142 percent, according to data compiled by Bloomberg. The securities probably will advance to par, according to Algebra Capital Ltd.
âI think the government will support Aldar,â Mohieddine Kronfol, a managing director at Algebra Capital, the Dubai firm that is 40 percent owned by San Mateo, California-based Franklin Resources Inc. with more than $300 million of assets under management, said in an interview on Aug. 19. The company has âenough money to last for a year-and-half, but beyond that they have to come up with a credible funding plan,â Kronfol said.
Aldar, which is 19.2 percent owned by Abu Dhabi-government backed investor Mubadala Development Co., had its credit ratings cut by Moodyâs Investors Service and Standard & Poorâs in the past month due to concern over the property market and ability to meet debt obligations. Abu Dhabi, the United Arab Emiratesâ richest of seven sheikhdoms, provided loans to Dubai last year to help state-related companies.
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