Delek Group Plans $2 Billion Debt Offering in U.S.

Financing generated by offering to go toward offshore gas exploration; offering is one of largest ever launched abroad by an Israeli company.

Eran Azran
Eran Azran
Send in e-mailSend in e-mail
Send in e-mailSend in e-mail
Eran Azran
Eran Azran

Yitzhak Tshuva's Delek Group is planning a $2 billion debt offering in the United States, one of the biggest ever carried out by an Israeli company on Wall Street.

Six months ago the group's subsidiary Delek Real Estate rescheduled funding from bondholders, dealing them a haircut of up to 65%.

JP Morgan is taking the lead on the offering on the American market, which will be made by subsidiaries Delek Drilling and Avner Oil Exploration. It is one of the largest ever launched abroad by an Israeli company and is aimed in part at recycling about $800 million in debt that served to finance the development of the Tamar offshore natural gas exploration site in which the two Delek firms are partners.

Commercial production of gas from the site began flowing at the end of March. Avner and Delek Exploration have a 31% stake in the Tamar partnership. The largest partner is U.S.-based Noble Energy, with a 36% stake.

The financing is also expected to be used to pursue oil and gas exploration at other offshore sites in Israel's economic waters where the Delek Group has obtained licenses to drill, including the Karish site and the Leviathan site, where huge gas reserves have been found but further search for oil is planned.

In other news related to Delek Real Estate, TheMarker learned this week that Bank Leumi had written off NIS 130 million of a NIS 270 loan in a deal that included an injection of NIS 140 million that Tshuva raised from his privately-owned companies. Despite such indications of financial difficulty, the Delek Group's bonds are trading at low yields of 2% to 3%, and despite the recent problems, the Delek Group is expected to have ready access to local financing due to the hundreds of millions in revenues that it is expected to get in the coming years from its natural gas exploration interests.

Click the alert icon to follow topics:



Automatic approval of subscriber comments.
From $1 for the first month

Already signed up? LOG IN


The Orion nebula, photographed in 2009 by the Spitzer Telescope.

What if the Big Bang Never Actually Happened?

Relatives mourn during the funeral of four teenage Palestinians from the Nijm family killed by an errant rocket in Jabalya in the northern Gaza Strip, August 7.

Why Palestinian Islamic Jihad Rockets Kill So Many Palestinians

בן גוריון

'Strangers in My House': Letters Expelled Palestinian Sent Ben-Gurion in 1948, Revealed


AIPAC vs. American Jews: The Toxic Victories of the 'pro-Israel' Lobby

Bosnian Foreign Minister Bisera Turkovic speaks during a press conference in Sarajevo, Bosnia in May.

‘This Is Crazy’: Israeli Embassy Memo Stirs Political Storm in the Balkans

Hamas militants take part in a military parade in Gaza.

Israel Rewards Hamas for Its Restraint During Gaza Op