S&P cuts Aldar's LT credit rating

Standard & Poor's ratings agency has downgraded its long-term corporate credit rating for Aldar Properties, a major Abu Dhabi developer, fromBB- to B, it said on Monday.

"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," S&P credit analyst Tommy Trask said.

The statement said S&P has also placed Aldar's B long- and short-term ratings on CreditWatch with negative implications.

S&P said the B long-term credit rating was "based on our view of the company's stand-alone credit profile... of CCC+, which incorporates an element of ongoing government support, plus two notches of uplift," reflecting its view that Abu Dhabi would provide support to the company if necessary.

Aldar is the developer behind a number of Abu Dhabi projects, among them Yas Island, which features the emirate's Formula 1 circuit and Ferrari World, which is billed as the largest indoor theme park in the world.

Aldar posted a loss of Dh1.52 billion dirhams in the first nine months of 2010 due "to lower gains from fair valuation of investment properties, provisions for bad debts and lower property sales recognised," according to a statement on its website.

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