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Are Israel's institutional investors finally turning picky? Two offerings completely flopped this week and one barely squeaked through, indicating a possible newfound wariness in the investment community.

The first offering to flop was the Xenia Ventures technology incubator, and the second was a new index-linked note issued by the KSM division of Excellence-Nessuah. Now TheMarker has learned that Lito Real Estate, a subsidiary of the TASE-traded Lito Group, tried to issue bonds last week and ran into trouble at the institutional phase of its offering.

Lito Real Estate meant to raise NIS 50 million by selling bonds, but the institutionals failed to bite. Demand ran low and market sources believe it only managed to complete the offering after a Lito group company agreed to buy more than NIS 20 million worth of the paper.

Its offering had been led by Poalim IBI and Gaon Underwriting.

Lito Real Estate primarily builds housing, and commercial and office space in eastern Europe, working with strategic partners. The company meant to provide its bondholders with attachments to its assets.

As for Xenia, last Wednesday it tried to raise NIS 24 million, but demand refused to materialize. The company reportedly decided to postpone its offering by two weeks, hoping the situation on the market will clear up.

At present Xenia's portfolio has holdings in 12 companies worth about $20.25 million. One of its portfolio companies is NeatStitch, which has developed a unique post-surgical suturing technique. In July 2006, the startup raised $12 million.

Even derivatives are having a tough time. The failed offering of the KSM was at the start of August. Clal Finance Batucha tried to issue long-term options on various indices, and came a cropper with 13-month call options on the Nikkei-225, the Euro Stoxx-50, the Nasdaq-100, the S&P-500 and oil and gold.

At the end of last quarter, Excellence-Nessuah tried to issue a KSM Dollar that tracks the greenback, but failed to find enough demand to assure minimal dispersion.