Oil Refineries Ltd. (TASE:ORL) raised NIS 400 million in a private placement of bonds last week, six years after its last private debt placement. Israel Corporation (TASE: ILCO) owns 37.1% of Oil Refineries and Israel Petrochemical Enterprises Ltd. (TASE:PTCH) owns 30.7%.
Oil Refineries expanded its Series A bond, which was issued in 2007. The investment institutions which bought the bonds may not carry out any transactions in them for six months. The Series A bond has an average duration of 3.3 years and is traded at a yield of 5.8%. Repayment is through 2020.
Oil Refineries must make $678 million in interest and principal payments through the end of 2014, but had just $79 million in cash at the end of March 2013. In addition to its cash flow from operations, the company said that the raising of credit was one of the means to meet its debt payments.
The capital raised last week will be partly used to meet the principal payments on the company's Series B and C bonds, due in 2013-15.
The debt issue is liable to result in a change in Oil Refineries' bond rating outlook. Standard & Poor's Maalot Ltd., in its last report on the company, gave the bonds a BBB+ rating with a "Negative" outlook, indicating the risk of a downgrade if the company shows no substantial improvement in its financial results and liquidity.
Published by Globes [online], Israel business news - www.globes-online.com - on July 28, 2013
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