Aabar Investment’s bonds, worth 2 billion euros ($2.2 billion), have lost about a quarter of their value this week after an auditor of the Abu Dhabi company gave an “adverse opinion” on its 2018 financial statements. Aabar was a subsidiary of International Petroleum Investment Co. (IPIC), which is now part of Abu Dhabi state fund Mubadala Investment Co. Its convertible Eurobonds due in 2020 and 2022 which, according to a JPMorgan note, were issued with expectation of support from the government of Abu Dhabi, have lost about 25 cents on the dollar each, Eikon Refinitiv data showed. Aabar said in a regulatory disclosure on Aug. 30 that Ernst & Young audited its 2018 financial statements and gave an adverse opinion “due to losses incurred during the financial year, accumulated losses and a deficiency of assets.” Aabar also said it was “considering the resources and options available to it to continue its normal operating activities and meet its financial obligations as they arise.” Aabar’s portfolio has included Dubai-listed contractor Arabtec Holding, which over the past few years has experienced financial troubles, and Zurich-based Falcon Private Bank, which has faced a criminal investigation over links to 1Malaysia Development Berhad (1MDB). In a note to clients on Tuesday, US investment bank JPMorgan likened Aabar’s situation to that of Dubai’s state-owned developer Nakheel in 2009. “We are once again confronted with a 100% state owned entity that lacks much standalone ability to meet financial obligations,” said the bank. Nakheel, developer of palm shaped islands off Dubai, was one of the worst hit by Dubai’s 2009-2010 real estate crash, forcing it into a massive debt restructuring. JPMorgan said it expected the state to intervene to help Aabar meet its obligations. “The company’s credit worthiness rested almost entirely on expectation of support from its direct (IPIC) and indirect (Government of Abu Dhabi) shareholders. We continue to believe that shareholders would step in to help support Aabar’s repayment of debt,” the bank said. A spokesman for Aabar declined to comment on Abu Dhabi’s potential support. The Abu Dhabi Department of Finance did not immediately respond to a request for comment sent after office hours.