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S&P downgrades Aldar ratings

Abu Dhabi, November 15, 2010

Standard & Poor's (S&P) ratings services has lowered its long-term corporate credit rating on Abu Dhabi-based property company Aldar Properties to 'B' from 'BB'.

S&P also said that it had placed the company's 'B' long-term and 'B' short-term ratings on CreditWatch with negative implications.

'Aldar's profitability and cash flow continue to be under pressure from challenging real estate market conditions and delayed handovers. As a result, we have lowered our corporate credit rating on Aldar to 'B' from 'BB-,' the ratings agency said in a statement.

'We continue to incorporate two notches of uplift to the 'ccc+' stand-alone credit profile, reflecting our expectation of a moderately high probability of extraordinary support from the government,' it added.

The rating is on CreditWatch negative to reflect the challenging market conditions and uncertainties regarding a proposed government-backed funding framework, the statement said.

'The downgrade reflects our view of the very challenging real estate market conditions in Abu Dhabi and the reliance of Aldar's future earnings and cash flow on continued demand for both the sale and rental of property and land,' explained Standard & Poor's credit analyst Tommy Trask.

'We continue to incorporate two notches of uplift to the 'ccc+' stand-alone credit profile, reflecting our expectation of a moderately high probability of extraordinary support from the government,' he added.-TradeArabia News Service




Tags: abu dhabi | Aldar | Rating | Standard & Poor |

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