Declining oil prices have had a significant impact on Babcock & Brown Air Limited’s (B&BAir) ADR price, which has appreciated significantly since our last update report, dated 14 July 2008. Although the ADR price movement is line with our expectations, the current ADR price continues to support a BUY rating. Hence, we maintain the B&BAir ADR a BUY. We continue to expect a positive currency impact on the European ADR over our investment horizon and given the current price supporting our BUY rating, we do not anticipate a change to our current European ADR rating.

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