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Underwriters say two of four bond series issued Monday were hard sells, with buyers least enthusiastic about the institutional stage of a bond issue by Koor Industries, an IDB Group company.

Capital market sources blame the low demand on IDB's practice of repeatedly expanding the same bond series, which creates surplus supply, and on the interest offered - 7.25% on bonds not linked to the Consumer Price Index.

Sources familiar with the issue said Koor has now set its sights on the public tender, but capital market players voiced doubts about the tender's success.

"Nochi Danker does not come to the market for NIS 150 million," said one source. "This is a failure. He will apparently have to issue now via the mother company, IDB."

A Delek Group bond issue is also at the institutional stage, and demand for those bonds was much higher, totaling NIS 350 million for two bond series. Even so, source close to this issue admitted it had been "tough going."

Demand was only slightly higher than supply, and the price expected to be set for both series will not be much above the minimum.

In the next few days the identities of the institutional investors who purchased the bonds will be publicized, and market sources figure many of these investors will likely be affiliated with the Delek Group - such as the Excellence Nessuah investment house.

Sources at Delek were actually pleased with the issue's results, and noted that all in all the surplus demand and the closing prices were reasonable. Delek Group sources also disclosed that the Phoenix insurance group did not order any bonds, and Excellence ordered just NIS 10 million worth.

The other two bond issues finished with much better results: Union Bank successfully completed its round of financing, and Ilan Ben-Dov managed to raise NIS 550 million in the public stage of Scailex's bond issue.

The Scailex bond issue, however, cannot be compared to the other three. While the other issues were conducted with no securities, Scailex's bonds are backed by shares in Partner Telecommunications. Hence the strong demand for those bonds.

"Scailex's bonds are attractive, thanks to the Partner shares," says a source in the underwriting market.

Union Bank raised NIS 380 million on its bond issue, which attracted NIS 800 million in demand.

A few insiders in the Israeli bond issue market viewed Monday's difficulties as an indicator that the Israeli market cannot absorb all the debt that companies are trying to cover by issuing bonds.

"The party's over," said an executive at one of the investment houses. "We won't see many issues with variable shekel interest - that market has completely collapsed, because the issues undertaken in the past few weeks are trading on the bourse below their issue price. Everything is going to be much more difficult."