The local corporate bond market is still on the boil, and companies have raised about NIS 1.1 billion in the past few days. The main offering was by Adama Holding Ltd. (TASE:ADMA.B1) (formerly Makhteshim-Agan), which announced last Thursday that it had raised NIS 690 million in an offering to financial institutions, in an expansion of the series that bears 5.15% annual interest. Those who took part in the offering received warrants on further units of the same series, which, if fully exercised, will increase the amount raised by a further NIS 340 million.
Also on Thursday, leasing company S. Shlomo Holdings Ltd. (TASE:SHLD), controlled by the Schmeltzer family, announced that it had secured NIS 260 million in the institutional stage, in an expansion of two bond series, one bearing interest of 3.75% index-linked, and the second at a fixed rate of interest of 5.75%. This morning, YH Dimri Construction & Development Ltd. (TASE: DIMRI)announced that it had secured almost NIS 160 million in the institutional stage of the offering of a new bond series, at an annual interest rate of 3.5%.
On the equity front, ADO Group Ltd. (TASE: ADO) of the Shikun & Binui Holdings Ltd. (TASE: SKBN) group announced that it had secured NIS 380 million in a rights issue, shortly after it raised a similar sum in a bond issue. The money raised is earmarked for the NIS 2 billion purchase of 5,800 housing units in Berlin.
More than NIS 3 billion have been raised so far this month, the main offerings earlier in the month being by First International Bank of Israel (TASE: FTIN) (close to NIS 700 million) and Dexia Israel (Public Finance) Ltd. (TASE:DXIL) (NIS 750 million), in what looks like a continuation of the intensity that characterized the bond market last year. The primary bond market looks as though it will continue to flourish in the near future, given the low interest rate environment, surplus liquidity, and an absence of investment alternatives.
Income producing real estate giant Gazit-Globe Ltd. (NYSE: GZT; TASE: GLOB) announced this morning that it plans a NIS 750 million offering, for which it has received confirmation of AA1 and Aa3 ratings from S&P Maalot and Midroog. Another real estate giant promoting a public bond offering, its first, is Azrieli Group Ltd. (TASE: AZRG), which in advance of the offering has received an AA+ rating from S&P Maalot. S&P Maalot also awarded an A-1 rating for short term commercial paper of up to NIS 1 billion for Azrieli's main competitor, Melisron Ltd. (TASE: MLSR).
One company expected to join those raising debt is Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL), which decided in the last few days to forego demand amounting to NIS 1.2 billion for a private placement, and has announced that it is examining "other alternatives for raising capital, including a public bond offering".
Among other offerings on the horizon, Kardan Vehicle Ltd. has received an A rating from S&P Maalot for an offering of up to NIS 200 million, and Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) has announced its intention of recycling debt by expanding two bond series to raise up to NIS 430 million.
2014 was a record year for bond offerings on the Tel Aviv Stock Exchange, with a total of NIS 42 billion raised, 20% more than in 2013.
Published by Globes [online], Israel business news - www.globes-online.com - on January 26, 2015
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