The Ticker: Delek Drilling, Avner Mull $400m Bond Sale

Israel Chem gains on Indian potash contract; Alon Blue Square to sell NIS 550m in bonds; Tel Aviv shares advance for third session.

Reuters

Delek Drilling, Avner mull $400m bond sale

Delek Drilling and Avner are weighing raising another $400 million in bonds to finance the expansion of the Tamar natural-gas field and begin development of the Leviathan field, market sources said yesterday. The two companies, which are controlled by Yitzhak Tshuva’s Delek Group, raised $2 billion in a 2014 bond issue through a special purpose entity called Tamar Bond. Sources said they are now weighing two options for raising another $400 million sometime in the next several weeks. The first is a “top-up” issue of $100 million in each of the four existing bond series, which pay between 2.8% and 5.4% and come due between 2016 and 2025 and now trade at 3.3% to 5.2%. The second is to issue new bond series due in 2027 or 2028. The cost of expanding Tamar and putting Leviathan into production could reach as high as $6 billion.  Last week, the Tamar partners said they were investing $260 million in the field. (Eran Azran)

Israel Chem gains on Indian potash contract

Israel Chemicals shares rose sharply in Tel Aviv Stock Exchange trading yesterday after Reuters reported that the company will ship potash to India at the same decade-low price agreed by another seller in June. Indian Potash Limited, one of the country’s biggest fertilizer importers, will buy around 600,000 metric tons of potash at $227 a ton on a cost and freight basis with a credit period of 180 days, officials, who declined to be named, told Reuters. With global supply of the crop nutrient exceeding demand, the price is one-third lower than last year but it puts ICL ahead of other suppliers in the rush to win contracts. In the last week of June, Belarus agreed to supply 700,000 tons of potash at the same price to India, one of the world’s top buyers of the material. ICL shares closed 1.3% higher at 15.10 shekels ($3.89). (TheMarker)

Alon Blue Square to sell NIS 550m in bonds 

Moti Ben-Moshe, the Israeli-German businessman due to take over Alon Blue Square, plans for the holding group to sell 550 million shekels ($141.5 million) in bonds next year. The plan was revealed in a cash-flow projection Ben-Moshe gave to bondholders yesterday, ahead of a July 18 vote on a debt bailout for the company. The bailout is based on Ben-Moshe’s closely held Extra Holdings’ injecting 600 million shekels this year and next and redeem Alon Blue Square’s 1 billion shekels of existing bank and bondholder debt within 12 months after the debt agreement takes effect, in part with money raised from the proposed 550-million-shekel bond issue.  (Yoram Gabison)

Tel Aviv shares advance for third session

Tel Aviv shares rose for a third straight session yesterday as European shares rose and the benchmark S&P 500 index rallied to a record intraday high. The Tel Aviv Stock Exchange’s benchmark TA-25 index ended 0.2% up at 1,434.91 points, while the TA-100 added 0.3% to 1,248.82, but turnover was just 1.07 billion shekels ($280 million). Idan Ofer’s holding companies were the session standouts: Kenon Holdings rose 3.7% to 41.05 shekels and the Israel Corporation added 2.8% to 611.70. Nova led TA-100 stocks higher, advancing 5.2% to 45.52 after reported $45 million in customer orders. Ceragon gained 7.15% to 7 shekels after reporting a $20-million order from Mexico. (Omri Zerachovitz)