The Ministry of Finance has been quick to jump on the recent rebound in the corporate bond market, and is reducing the government's participation in the debt recycling funds by NIS 200 million. The ministry's draft "Invitation for bids for selecting the manager of the first debt recycling fund", published last night, states that the government will commit NIS 500 million for first fund.
The government will commit NIS 300 million for the second debt recycling fund, if and when it is established. The Ministry of Finance originally planned a commitment of NIS 600 million for the first debt recycling fund and NIS 400 million for the second fund.
The Ministry of Finance stated in the prequalification documents that it would invest NIS 400-600 million in the first debt recycling fund and NIS 200-450 million in the second fund. The reduction in the commitment still leaves the total commitment within the ministry's original range. The reduced commitment is, however, less than the market expected.
The Ministry of Finance said that, even after the reduction, the amount of the debt recycling funds is still substantial for the market, and that, furthermore, more debt recycling funds could be established.
The winner in yesterday's tender for the first debt recycling fund will be the investment institution that offers the largest investment. The deadline for submitting queries and requests for clarifications is February 12, and the deadline for bids is March 1. The winner will be announced on March 5.
Seven management companies participated in the prequalification stage, and the Ministry of Finance approved six companies to continue to the next stage. The ministry requested clarifications from the seventh firm, KCPS & Company, about minor matters, and it will probably be allowed to bid in the tender.
The largest institutional investor's commitment obtained by the Ministry of Finance in the prequalification stage was reportedly NIS 1.08 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on February 9, 2009
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