More Than 10 Exchanges Said to Be Eyeing Tel Aviv Stock Exchange Stake

Business in Brief | Major demand for Starwood Capital bonds in institutional phase ■ Bank Hapoalim to set aside another $75 million over U.S. tax investigation ■ Teva seeking to raise $3.9 billion in bond offering

The Tel Aviv Stock Exchange (TASE) building in Tel Aviv.

More than 10 exchanges said to be eyeing TASE stake

More than 10 foreign stock exchanges have shown interest in buying a controlling stake in the Tel Aviv Stock Exchange, a source close to the exchange told Reuters on Tuesday. Last September, the TASE demutualized and became a for-profit exchange, offering to buy out its shareholders to list on its own bourse in 2019 at a value of about $150 million. TASE CEO Itai Ben-Zeev said this month that the TASE has commitments from member banks to buy back 71.7% of their shares, a stake that will be sold to a large foreign exchange as a strategic partner ahead of going public. Member banks would retain a 22% stake in the TASE while TASE employees own another 6%. Israeli media have reported that exchanges in London, Toronto, Hong Kong, Singapore, Australia and Warsaw have shown an interest. TASE officials declined to comment. Ben-Zeev has said he was in talks with a number of exchanges but did not say who or how many, adding that he believed “for sure” that there would be a deal with an exchange by mid-April. (Reuters)

Major demand for Starwood Capital bonds in institutional phase

A subsidiary of the American hotel and retail firm Starwood Capital group wrapped up the institutional round of its new bond offering in Tel Aviv on Tuesday in the largest bond offering so far this year by a U.S. real estate firm in its debut in Tel Aviv. A billion shekels ($287 million) in bonds, issued by Starwood West, a division of Starwood Retail Partners, were sold on 1.3 billion shekels in orders. Starwood will soon undertake the public phase of the offering, in which it hopes to raise another 100 shekels. Since the beginning of the year, more than 30 U.S. real estate companies have raised more than 20 billion shekels in Tel Aviv. (Michael Rochvarger) 

Bank Hapoalim to set aside another $75 million over U.S. tax investigation

Bank Hapoalim will set aside an additional $75 million to cover a potential settlement in a U.S. investigation of possible tax evasion by the bank’s clients there, the bank said on Wednesday. Hapoalim said it had determined that more of its clients may be relevant to the investigation by the U.S. Department of Justice. Its provisions for the investigation now stand at $343 million, Hapoalim said. The bank estimates “that its overall exposure is higher than the amount of the provision it expects to include in its financial reports for 2017.” Hapoalim added that the latest amount to be set aside was not final and could change by the time it publishes its financial results on March 26. In September. Israel’s banking regulator ordered lenders to reduce their overseas operations and keep a closer eye on subsidiaries to better comply with risk and compliance rules. The clamp-down came in response to the Hapoalim investigation and similar cases with lenders Leumi and Mizrahi Tefahot. Leumi paid $400 million in fines to U.S. authorities in late 2014. (Reuters) 

Teva seeking to raise $3.9 billion in bond offering

Teva Pharmaceutical Industries announced on Wednesday that it would issue one billion euros ($1.22 billion) in bonds in one or more euro bond series, as well as an additional $2.25 billion in dollar-denominated bonds. The funds generated by the issues are to be used to pay off $2.3 billion in dollar and yen debt as well as $1.5 billion in senior notes coming due this year, the company said. The new bonds are designed to refinance debt and to extend the average life of Teva’s debt, which at the end of last year stood at $32.5 billion. The sums were largely accumulated from the company’s purchase of Actavis Generics for $39.3 billion in 2016. Teva’s bonds have been cut to junk status by the three major ratings agencies. (Yoram Gabison)

NIS 6 billion in February TASE bond issues 

Despite some jitters in the capital markets in February, particularly on the bond markets, following a rise in bond yields around the world, the Israeli bond market continued full steam ahead, generating about 6 billion shekels’ worth ($1.7 billion) of new financing. This was fueled by liquidity among institutional investors and the search for high yields. When the 3.5 billion shekels in bonds that the Israel Electric Corporation issued abroad is added to the mix, the figure jumps to 9.5 billion shekels for the month. More than 20 companies, mostly from the real estate sector, issued new debt offerings in February. Some of the activity was spurred by the approach of their publication of their annual financial results, which may actually then put a damper on activity in the coming weeks. (Guy Erez)

Shares generally lower on the TASE

The benchmark Tel Aviv 35 index declined by 0.69% to 1,500.56 in Wednesday’s trading on the Tel Aviv Stock Exchange while the broader Tel Aviv 125 dropped by 0.67% to 1,361.99. Trading volume was 1.3 billion shekels ($372 million). Among the shares that bucked the trend was Hadera Paper, which closed up 4.96 % at 251.90 shekels on a strong earnings report. (TheMarker)