Maalot the Israel Rating Company will rate Derech Eretz Highways bonds AAA for its first tier senior debt and A for its second tier senior debt. Derech Eretz has the Cross-Israel Highway franchise.
Maalot yesterday notified Derech Eretz of its “final positive indication” for the bonds’ rating. Maalot examined the Cross-Israel Highway project, including northern section 18 of the toll road. Derech Eretz is holding advanced negotiations with the Ministry of Finance to obtain the franchise to build and operate this section.
In November 1999 at its financing closing stage, Standard and Poor’s rated the project’s first tier senior debt at BBB.
Derech Israel chairman and Africa-Israel Investments CEO Pinchas Cohen told “Globes”, “It’s difficult to compare the two ratings, but we’re talking about a significant improvement. We’re highly impressed by the impending rating, and it is well above our expectations. The rating has great importance, and unequivocally says that the financial institutions believe in Derech Eretz and the project.”
Ministry of Finance officials also expressed satisfaction with the rating. Although a franchise contract to pave section 18 has not yet been signed, due to disagreements over the guarantees Derech Eretz has to deposit with the state, the officials believe a deal will be signed within a few days. The cost of the 17-km section 18 between the Barkai Junction and Elyakim is estimated at $215 million. Derech Eretz will receive an $8 million construction grant and will raise the rest through a bond issue.
Published by Globes [online] - www.globes.co.il - on February 18, 2003
Published by Globes [online] - www.globes.co.il - on February 18, 2003