Foreign funds continue to focus on junk bonds of Israeli investment companies. After IDB Development Corp. Ltd. and Elbit Imaging Ltd. (Nasdaq: EMITF; TASE: EMIT) foreign investors are now targeting the bonds of Ampal-American Israel Corporation (Bulletin Board: AMPLQ; TASE:AMPL), controlled by Yosef Maiman. Sources inform ''Globes'' that behind the letter to Ampal bondholders, which Migdal Underwriting and Business Initiatives Ltd. distributed yesterday, is a foreign investment fund that wants to buy 30% of Ampal's Series C Bond at a nominal value of NIS 50 million. It should be noted that a holding of this size will create a blocking minority giving the bondholder the key vote in bondholder decisions.
Ampal's Series C Bond totals NIS 172 million. Its current price on the TASE is NIS 0.265, which means that the buyer's offer amounts to a 74% write-off on the bond's adjusted value. In contrast to Ampal's two other TASE-listed bonds, the Series C Bond has a safety cushion: the next two interest payments are secure because the money is held by the bond's trustee and will only be used to pay the bondholders.
Yesterday, Migdal Underwriting forwarded a letter to the investment institutions which hold Ampal's bonds, asking them to submit offers to sell them. This is a fast-track process, since the number of bonds offred and the asking price (which will not exceed NIS 0.26 per NIS 1 nominal value) must be submitted by 5 pm today. Migdal Underwriting is the mediator between the buyer and the sellers.
Published by Globes [online], Israel business news - www.globes-online.com - on January 28, 2013
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