Aldar to sell $970mn in bonds to Mubadala

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Aldar Properties said on Thursday it would sell $969.5 million in convertible bonds to Mubadala Development Company. (Getty Images)

Abu Dhabi developer Aldar Properties said on Thursday it would sell 3.56 billion dirhams ($969.5 million) in convertible bonds to state-controlled investment firm Mubadala Development Co. The property firm, with about $65 billion worth of projects in the pipeline, has been raising funds as it spearheads the Abu Dhabi government's drive to develop residential and leisure districts for the world's fifth-largest oil exporter. The bonds it sells to Mubadala, which owns 14.82% of Aldar, would be convertible into its shares at the average trading price of the stock in the three days prior to the bonds being issued, Aldar said in a statement on the bourse website.

Aldar last year sold $2.53 billion of five-year bonds that comply with an Islamic ban on the payment of interest. It also took out a $2.1 billion four-year loan last June, and said this week it had agreed on a $599 million Islamic lending facility from a group of UAE banks.

Through its holdings in Aldar and other companies, Abu Dhabi is spending billions of dollars on real estate, tourism and cultural projects to help diversify its economy away from oil. Aldar allows non-UAE nationals to own up to 40% of its publicly traded stock, which has surged more than 10% this month. The shares were up 1.31% at 7:20am GMT after Aldar posted a tripling of first-quarter profit on Wednesday.

Still, the stock is down more than 5% this year, after more than tripling in 2007. The convertible bonds would have a zero coupon and mature in November 2011, Aldar added. (Reuters)

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