Israel Electric Corp. only raises NIS 737 million

The debt offering was a clear failure for IEC, which had hoped to raise three times the amount from institutions.

The attempt by Israel Electric Corporation (IEC) (TASE: ELEC.B22) to raise debt in a private offering to institutions without government guarantees has ended in failure. Sources inform "Globes" that the offering, which closed shortly before midnight, only succeeded in raising NIS 737 million, on thin demand. Most of this sum, NIS 550 million was raised at the high interest of 6.5%. The company is seeking advice on where to go from here.

The debt offering was a clear failure for IEC, which had hoped to raise three times the amount. The utility had yesterday published details of the offering as part of an expanded series of electricity linked bonds issued in two new linked series. These series are repayable after four and seven years, and are rated Aa3 with a negative outlook.

At the start of November, IEC raised NIS 1 billion in debt at an average margin of 0.8% interest above similar government bonds, even though that offering was backed by government guarantees.

Published by Globes [online], Israel business news - www.globes-online.com - on November 22, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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