Today, Alony Hetz Property and Investments Ltd. (TASE: ALHE) will start a NIS 1 billion fund raising round, aimed at replacing bank debt secured by a lien with public debt without collateral. The issue will be managed by Value Base, led by Chairman Victor Shamrich and CEO Ido Neuberger. Alony Hetz CEO and controlling shareholder Nathan Hetz personally owns a 20% stake in Value Base.
Alony Hetz's issue will be carried out by an expansion of bond series I. Alony Hetz bond series I is a shekel series bearing 3.85% interest. The capital is repayable in four 10% installments between 2020 and 2023, and four 15% installments in 2024-2027. The bonds have a duration of 6.5 years. They are rated AA-, with a stable outlook.
The issue will comprise a package of one thousand securities, with a NIS 1,095 value and 15 bond warrants with a value of NIS 105 NIS (NIS 7 per option), and an overall package price of NIS 1,200. The package will be issued to financial institutions at a discounted price of NIS 1,179, representing a 0.75% discount.
Nathan Hetz seeks to use funds from this offering to pay NIS 970 million of bank loans from foreign banks, which are to be paid in 2018-9. These loans are backed with securities valued at NIS 2.3 billion. The securities will not be transferred to the public, which will replace the bank loans with lower-interest loans.
Capital market sources told "Globes" today that while, generally speaking, this offering will enjoy high demand by financial institutions, we are at the beginning of a series of offerings so far totaling over NIS 8 billion per month. Without careful analysis of each offering, the public may become involved in investments that do not properly reflect risks, and could even result in financial losses.
After the banks' lien is released, no further liens will be imposed on the company and therefore, theoretically, in the case of insolvency, bondholders will be able to take over free assets (if any such assets remain).
Published by Globes [online], Israel business news - www.globes-online.com - on August 30, 2016
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