Moody's might upgrade Aldar

Moody's Investors Service said it placed on review for possible upgrade Aldar Properties PJSC's B2 corporate family rating, its B2-PD probability of default rating, the B3 rating for the AED 3.75 billion of sukuk due 2013 issued by Sukuk Funding (No. 2) Ltd. and the B3 rating for the $1.25 billion bond due 2014 issued by Atlantic Finance Ltd.

The review follows the agreement by the boards of Aldar and Sorouh Real Estate PJSC to recommend a merger of the companies to their shareholders. The non-cash transaction will involve a share swap resulting in new Aldar shares issued to Sorouh shareholders followed by Aldar assuming the assets and liabilities of Sorouh.

Moody's said the review for upgrade reflects its assessment that the Aldar-Sorouh merger will be credit positive with the combined group having a stronger and more conservatively positioned financial profile than the current B2 rating suggests.

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