After 2018 opened with a storm of corporate bond offerings, amounting to some NIS 17.7 billion, 5.3% up on the corresponding period of 2017, March is continuing the trend. On Thursday, two huge offerings, one by Tamar Petroleum and the other by Amidar, successfully completed the institutional stage.
Tamar Petroleum secured $560 million (about NIS 2 billion) in an offering of Series B dollar-denominated bonds with a duration of 5.8 years. Demand totaled NIS 2.3 billion, and the interest rate was set at 6.1%. The offering was led by Leader Underwriters and Barak Capital. Tomorrow's public offering will be purely "for the protocol", since the company has raised the entire sum it sought.
Midroog assigned the bond an A1 rating. The funds are earmarked for the purchase of 7.5% of the rights in the Tamar gas reservoir from US company Noble Energy. The price is $800 million, of which $560 million will be paid in cash and the remainder in an allocation of shares in Tamar Petroleum amounting to 43.5% of the company. The deal values the Tamar reservoir at nearly $11 billion. When it is completed, Tamar Petroleum will have 16.75% of the rights and Noble Energy 25%.
Public housing company Amidar secured at least NIS 900 million in the institutional stage of its debt offering. Amidar's Series A bond is shekel-denominated and non-linked. The interest rate set in the institutional offering was 1.45%. The final rate will be set in the public offering to be held in the next few days. Amidar seeks to raise a further NIS 100 million.
The offering received the highest ratings for local debt, with a stable outlook, from both S&P Maalot (AAA) and Midroog (Aaa), thanks to a commitment from the state to transfer to Amidar funds to meet payments of principal and interest. The offering proceeds will be used to buy housing units for the pool of public housing up to the end of 2019.
Amidar's activity is in housing for needy sections of the population. It is Israel's largest public housing company. It activity is mainly in managing housing units for those entitled to public housing and sheltered housing for the aged on behalf of the Ministry of Construction and Housing.
In the first nine months of 2017, Amidar recorded revenue of NIS 285 million and an operating profit of NIS 13 million.
A third company that has successfully completed a debt offering is real estate investment trust Menivim which, in a public offering without an institutional offering, raised NIS 51.8 million. The company had intended to raise NIS 50 million, but demand for the offering was more than double that. Annual interest on the index-linked bond with a 4.2 year duration was set at 1.5%.
Published by Globes [online], Israel business news - www.globes-online.com - on March 12, 2018
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