Aldar Properties PJSC’s Islamic bonds, the worst-performing debt among Abu Dhabi-linked companies, are rebounding on speculation the government will support the company.
The 5.767 percent convertible Islamic notes due in November 2011 from Abu Dhabi’s 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.
“I think the government will support Aldar,” 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 “enough money to last for a year-and-half, but beyond that they have to come up with a credible funding plan,” Kronfol said.
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