Israel Railways' great bond issue is getting nearer. Israel Railways management has chosen underwriters to lead the debt offering planned by the state-controlled company: Clal Finance Underwriting, Poalim IBI, and Barak Capital. The bond issue was approved in the draft state budget for 2015, and Israel Railways, managed by Boaz Tsafrir, intends to raise NIS 1-2 billion. The aim is to use the aid of the capital market and prevailing low interest rates to ease the burden on the company's, and the state's, budget.
Israel Railways intends to raise NIS 1 billion in each of the years 2015 and 2016. Company sources explain that "the bond issue will boost Israel Railways' independence and financial flexibility, and reduce its dependence on the state budget and the public purse." Even so, money raised on the capital market is the public's money. According to its website, Israel Railways employs 2,370 people.
A bond offering by Israel Railways, if and when it happens, will attract considerable interest on the local capital market, both because it is an infrastructure company, and because of the experience gained in recent years of state-owned companies that have issued corporate bonds. This includes the sad saga, still in progress, of another bond issue by a state-owned company, Israel Postal Company, and before that the collapse of agricultural exports company Agrexco (in which the state was one of several shareholders). Alongside these companies there is also a very large state-owned company whose huge debt, amounting to tens of billions of shekels, is a topic continually in the headlines: Israel Electric Corporation.
Published by Globes [online], Israel business news - www.globes-online.com - on January 26, 2015
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