The Hadas dollar security, issued by IBI Underwriting & Investments (1993) and Pi Financial Instruments, has scored a success. Demand for the issue, which closed today at noon, reached NIS 300 million. The per unit price will be determined tomorrow, according to the representative shekel-dollar exchange rate, which will also be the effective rate for the expiry of the dollar options for August.
The underwriters obtained a rating from Maalot the Israel Rating Company for up to $360 million, $100 million of which was acquired by their subsidiary. Securities amounting to $170 million were issued, including the public tender and the issue to the subsidiary.
Sources inform “Globes” that the underwriters are preparing additional issues of the security, believing the high demand for the Hadas paper will persist after trading in it begins on Thursday, and future issues will also find buyers.
The idea behind the Hadas issue is similar to that behind the Tali 25. The Tali 25, a basket of the shares listed in the Tel Aviv 25 index issued by Ofek Leumi Financial Instruments, a subsidiary of Ofek Securities and Investments, is designed to serve as an underlying asset for investors wishing to invest in the Tel Aviv 25, with guaranteed high liquidity, and other advantages of a direct investment in shares.
The idea behind the Hadas is similar, with one major difference the underlying asset is the current shekel-dollar exchange rate. Pi says that the Hadas is the first instrument in Israel that enables investors to trade in the current inter-bank shekel-dollar exchange rate. The point is that the current exchange rate, the rate being constantly determined in the banks’ trading rooms, is involved, as opposed to the representative rate, which the Bank of Israel determines once a day.
The Hadas will pay the investor LIBOR interest minus 0.5%, payable quarterly. Pi says that it will not charge a commission on the paper; it will earn a profit only from the spreads between the quotes, and between the interest it gets from the banks, and that it pays to those holding the paper.
Published by Globes [online] - www.globes.co.il - on August 25, 2003