Bondholders in Abu Dhabi property developer Aldar Properties, which received yet another government lifeline last week, have seen the yield on its 2014 high-yield bond tumble to historic lows this week. But the company's debt may still offer value to investors looking for exposure to Abu Dhabi.
The yield on Aldar's $1.25 billion, 10.75 per cent bond maturing 2014 dropped to 5.52 per cent on Wednesday, the lowest since issue in 2009. That was about 350 basis points tighter than in early October, when spreads of Gulf high-yield bonds in general widened sharply because of jitters about the euro zone debt crisis.
By contrast, the struggling developer's share price has slumped to record lows in recent weeks because of fears of share dilution and an eventual delisting. The company has officially denied it has any plans to delist from the Abu Dhabi stock exchange.
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