Kenon Holdings Ltd (TASE:KEN: NYSE: KEN-WI), controlled by Idan Ofer, yesterday announced that it had completed a $650 million bond issue through CDA, a Peruvian company under its control. The money will be used to replace a more expensive debt to an overseas consortium of banks.
Israeli capital market sources expected that in view of the liquid state of investment institutions in Israel and the strong demand they showed in the IPO by OPC Energy, Kenon's Israeli energy arm, at least part of the bond issue would be held in Israel. The company, however, never considered this option, preferring to hold an overseas private bond placement at 4.125% interest payable in August 2027.
CDA, Kenon's Peruvian arm, produces electricity in the local market. The company owes over $590 million to a consortium of banks that includes Sumitomo Mitsui, The Bank of Nova Scotia, and Scotiabank Peru. Interest on the loan various from 2.75% to 6.25%.
Kenon subsidiary AC Power tried to hold its IPO in the US several months ago at a company value of $1.2 billion. Demand was meager, and the company therefore adopted the alternative of raising capital through its operational subsidiaries in Latin America and Israel that are considered attractive.
OPC Energy, AC Power's Israeli arm, last week held a share offering with a complete guarantee by the underwriters, a guarantee that proved unnecessary when demand in the institutional stage proved to be strong. Before the public stage, the Committee for the Reduction of Concentration announced that it would not allow the company to develop any more private power stations in Israel, due to the group's high degree of economic concentration in Israel.
Published by Globes [online], Israel Business News - www.globes-online.com - on August 17, 2017
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