The wave of foreign companies hoping to raise money on the Tel Aviv Stock Exchange (TASE) began yesterday sluggishly when Spenser Equity Group raised only NIS 200 million in an institutional tender. This was only half the sum the US Jewish real estate developer was hoping to raise, including the public tender. Israel's major insurance companies and provident funds, and many mutual abstained from the tender.
The disappointment occurred despite the fact that Spencer, owned by US entrepreneur Joel Gluck was given an A rating by both Midroog and S&P Ma'alot for raising NIS 400 million in the bond offering. The relatively low demand in the institutional tender will require to consider lowering the offering, and the company is acting accordingly, and has already lowered it by 10% to NIS 360 million.
Another outcome of the disappointing demand is that the maximum interest fixed for the bond is 6.9% (not linked to the Consumer Price Index). This is significantly lower than in previous similar offerings.
Spencer's offering is scheduled to be the first in a series of four offerings by real estate companies operating in the US and incorporated in the Virgin Islands, which are owned by US Jewish developers. By the end of the month these companies are hoping to complete bonds offerings worth NIS 1.5-2 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on November 20, 2014
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