The Ticker / U.S. Property Company Stages Successful Tel Aviv Bond Sale

Mobileye likely to delay secondary offering; Hapoalim to report provisions for possible U.S. penalties; Lower Wall Street trims TA-25’s gains.

Mobileye President & CEO Ziv Aviramon, CFO Ofer Maharshak, and Chairman Amnon Shashua, prepare to ring a ceremonial bell as their company's IPO begins trading, on the floor of the NYSE, Aug. 1, 2014.
AP

The Related Companies, the giant New York property investor whose portfolio includes the Time Warner Center, enjoyed strong demand for the first part of its 800-million-shekel ($200 million) bond offering in Tel Aviv late on Tuesday. Institutional investors put in orders for 1 billion shekels of the 690 million shekels of bonds on offer to them (the rest being sold later in a public tranche). As a result, Related is seeking the go-ahead from bond rating agency S&P Maalot to increase the offering to as much as 900 million shekels. The interest rate on the 4.6-year bonds was fixed at 5.2%, a 458-basis-point premium over equivalent Israeli government bonds. Maalot rated them A-plus. Although Related is only the latest in a series of U.S. real-estate companies to tap Tel Aviv for debt, it was the first to win over Israel’s biggest institutional investors as buyers. Among them were Altshuler Shaham, which had been a critic of the phenomenon, but subscribed to 140 million shekels of Related bonds. (Eran Azran)

Mobileye likely to delay secondary offering

Mobileye, the anti-collision technology company that went public last summer, is recommending holding off on a planned secondary offering until its share price reaches at least $40. Management made known its view in a letter to the board on Tuesday, six week after it formally filed for the offering. If accepted, it would mean the offering, which would consist almost entirely of shares by insider shareholders, such as Goldman Sachs and the company’s founders, will not be held anytime soon as the price would have to climb 20% to meet the target. Mobileye shares have sunk 40% in the last four months to close Tuesday at $33.81, although they are still up a third for the time of the initial public offering last August. Analysts from Citigroup, Deutsche Bank and Wells Fargo, among others, on Tuesday published reports that said Mobileye’s price should reach anywhere between $53 and $62. (Michael Rochvarger)

Hapoalim to report provisions for possible U.S. penalties

Bank Hapoalim will disclose the fact that it has been making provisions against penalties in an expected settlement into a U.S. tax investigation when it reports fourth-quarter earnings next week. The bank agreed to the disclose after a meeting this week with the Israel Securities Authority and the Bank of Israel, where it also failed to convince regulators that its exposure to penalties was relatively small and could be covered by the 120 million to 150 million shekels ($30 million-$38 million) of set-asides it took without disclosing them in the second and third quarters. In any case, the bank will say in its financial report that it is disclosing the provisions because regulators gave it no choice. Hapoalim remains optimistic that its exposure is limited, according to a Citigroup analyst report released on Tuesday. It noted that U.S. authorities have asked it only once, in 2011, to hand over a list of American clients suspected of evading U.S. taxes with the help of the bank’s Swiss unit. (Sivan Aizescu)

Lower Wall Street trims TA-25’s gains

Traded shares traded higher on the Tel Aviv Stock Exchange yesterday in the last day of a holiday-shortened trading week, although some of the gains were lost as Wall Street opened lower. The benchmark TA-25 index ended up 0.2% at 1,529.78 points, while the TA-100 rose 0.1% to a 1,356.85 finish, on turnover of 1.2 billion shekels ($300 million). Tech and bank shares, however, were down, led by a 1.9% decline for Bank Hapoalim to 17.90 shekels, a 2.6% fall for Allot Communications to 36.45 shekels and a 2.2% drop in EZchip to 2.2% shekels. Bank Leumi edged down less than 0.1% to 13.82 shekels. The lender said it received Bank of Israel approval to delay releasing its 2014 financial report until the end of the month so it can include results for its 18% holding in The Israel Corporation. In the fixed-)income market, the government’s Shahar bond due in 2024 fell 0.2%, to raise its yield to 1.68%. The TASE is closed tomorrow for the Purim holiday. (Omri Zerachovitz)