Delek Firms Complete $2 Billion Bond Offer

Tnuva valuation rises ahead of takeover; Nasdaq sees more Israeli IPOs this year; New York property firm to sell bonds in Israel; Shares dip in interest-rate speculation.

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At Tnuva headquarters in Glilot, just north of Tel Aviv.
At Tnuva headquarters in Glilot, just north of Tel Aviv.Credit: Moti Milrod

Delek Drilling and Avner Oil said Sunday they had completed $2 billion in an international bond offering to help finance development of the Leviathan natural gas field. The companies, both of which belong to Delek Group, reported $13.5 billion in bond orders. “This shows unprecedented confidence by European, U.S. and Israeli financial markets in the vision of Delek Drilling, Avner and Delek Group,” Avner chairman Gideon Tadmor said. Five bond series were issued, with maturities extending to as far as 2025, the companies’ statement said. Avner and Delek together own 45.3% of Leviathan, followed by Texas-based Noble Energy and Ratio Oil. Delek Drilling closed up 1.4% at 320.84 shekels ($92.82), while Avner rose 1.5%, to 3.68 shekels in Tel Aviv. (TheMarker Staff)

Tnuva valuation rises ahead of takeover

Tnuva, Israel’s biggest food maker, is now worth 8.1 billion shekels ($2.3 billion), 360 million shekels more than its previous valuation, based on the company’s first-quarter results, released over the weekend. The revised valuation can be attributed to a rise in the company’s operating margin in the three months ended March 31, according to a financial report issued by its biggest shareholder, British private equity fund Apax Partners, last weekend. The revised valuation comes as Apax and Tnuva’s other shareholders decide whether to sell the company to China’s Bright Food or sell its shares in an initial public offering in Tel Aviv. Bright Food executives met last Thursday with local banks to discuss its taking over the special purpose vehicle through which Apax and Mivtach Shamir control Tnuva. The SPV borrowed 1.8 billion shekels, a debt that Bright Food will assume if it takes over the company. (Michael Rochvarger)

Nasdaq sees more Israeli IPOs this year

Nasdaq expects a stronger year for initial public offerings of Israeli companies than in 2013, stock exchange vice chairman Meyer Frucher told Reuters during a visit to Tel Aviv on Sunday. “Last year there were four IPOs and they had on average an 85% increase [in their share price] since the IPO. So the Israeli companies do well on Nasdaq,” he said. Two main problems Israeli companies face are finding initial capital investment and later being able to maintain themselves as global entities, he said. Nasdaq hopes to attract them by offering broad corporate services to tackle those challenges. Frucher said Nasdaq has also been talking with the Tel Aviv Stock Exchange about working together to help early stage companies grow. (Reuters)

New York property firm to sell bonds in Israel

Extell Development Company, a U.S. real estate investor and manager controlled by Gary Barnett, filed a prospectus on Sunday to sell up to 700 million shekels ($202.5 million) in bonds. If the sale goes through, it will become the second U.S. property company to sell debt in Tel Aviv after the Leser Group. The bonds received an A2 rating from Midroog. Extell controls some 20 million square feet of New York real estate, a quarter of it in development. Extell is apparently attracted to Israel because of the low rates of interest it can borrow at in the local market. However, the bond debt will be subordinated to bank debt the company holds, and the bonds offer no collateral. (Eran Azran)

Shares dip in interest-rate speculation

Tel Aviv shares drifted lower on Sunday, amid expectations that the Bank of Israel may cut interest rates later this month to stem the shekel’s latest gains. The benchmark TA-25 index edged down 0.03% to close at 1,371.79 points while the TA-100 index lost 0.1%, to 1,236.68 points. Turnover was a brisk (for a Sunday) 642 million shekels ($1.86 billion). Teva Pharmaceuticals took a 2.7% dive to end at 171.30 shekels after denying reports that it was interested in acquiring India’s Cipla.Technology stocks were generally lower, with the newly launched TA Tech Elite index losing 0.9%, to 318.05 points, on its first day. However, Ormat rose 5.1% to 36.24 after its Ormat technologies unit and TowerJazz added 98% to 28.55.. (Eran Azran)

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