Four days ahead of new bond offering, Fishman repurchased Industrial Building Corp bonds
Eliezer Fishman bought back bonds issued by Industrial Building Corporation, four days before the company announced new issuance.
Fishman, who controls real estate companies Jerusalem Economic Corporation and Industrial Buildings, spent NIS 850,000 on Industrial Buildings bonds on Monday. He bought the bonds, NIS 250,000 series B8 and NIS 600,000 series B7, through Industrial Buildings' subsidiary, Hachevra Lepituach Hamalacha.
After Industrial Buildings announced a plan Monday to raise NIS 100 million by expanding the series B7 bond issue, the price of those bonds fell sharply.
Fishman may have elected to repurchase bonds in order to support their price, and prevent the yield from rising right before the issue.
Yields on the Fishman company bonds have fallen sharply since the beginning of the year. Last Thursday the yield rose from 5.5% to 6.14%, following a decline of 1% in the price on Sunday and a further slight decline Monday.
In August, Industrial Buildings will have to pay NIS 164 million in principal and NIS 17 million in interest to bondholders. Fishman hopes to raise at least NIS 100 million just now, by expanding the B7 and B12 bond series by up to NIS 300 million. The money raised will be used mainly for recycling debt.
"Industrial Buildings has the resources and the ability to meet all its obligations to bondholders," Fishman stated. "This commitment to bondholders was and will continue unchanged, with or without the planned round of financing. The principle that guided and continues to guide me is to meet my commitments. I have always done this, and will continue to do so in the future."
The upcoming bond offering by Industrial Buildings,indicates that a degree of confidence is returning to the stricken market, though many pundits counsel investors against inappropriate exuberance, given that the global economic crisis is not over. At best, many economists say, the present period can be characterized by the end of panic over the global recession, rather than actual signs of recovery.
Meanwhile, for the first quarter of 2009, Fishman firm Jerusalem Economic Corporation admitted to heavy losses.
In late May the company advised investors that it had lost NIS 102 million in the first quarter, in net terms.
In the corresponding three months of 2009, Jerusalem Economic Corp had lost NIS 32 million.
Most of the losses were due to a drop in net operating income and the value of the properties it owns around the world, as the recession slammed property prices. The firm also said it would reassess the projects in which it's involved.