Delek Drilling and Avner Oil and Gas LP (TASE: AVNR.L), which together hold 45% OF THE Leviathan offshore gas reservoir, announced this morning that they had signed a binding agreement (commitment letter) with HSBC Bank Plc and JP Morgan Limited to finance their shares of the stage 1 development of Leviathan. The finance will amount to $1.5-1.75 billion. This is the largest project financing ever executed in Israel for a project in the development stage. RELATED ARTICLES Delek units report rise in Tamar gas production Paz signs $700m Leviathan gas deal Israel invites gas exploration bids Ratio on way to financing Leviathan The finance will be extended against a lien on the partnerships' stakes in Leviathan, and at a variable interest rate payable every three months and calculated as three-month LIBOR plus a margin. The principal will be repayable in one payment after four years, through the issue of a long-term bond, similar to the successful bond issue for the Tamar project. The loan is part of the implementation of a long-term financing strategy aimed at reducing the partnerships' financing costs, and it will finance most of their investments in the development of the reservoir up to the point that gas starts flowing from it. This stage includes the supply of gas from Leviathan to the local Israeli economy, to Jordan, the Palestinian Authority, and any other regional agreements that may be signed. Published by Globes [online], Israel business news - www.globes-online.com - on November 27, 2016 © Copyright of Globes Publisher Itonut (1983) Ltd. 2016
