Mekorot completes drive to raise NIS 1.2b.
The Mekorot national water company completed the institutional phase of raising NIS 1.2 billion in new debt on Monday evening, it said Tuesday in a press release. The raising was carried out by expanding two existing series of bonds: Series 10 (shekel and CPI-linked, about 3.7 years) and Series 11 (shekel and CPI-linked, about 13.75 years).
In Series 10, Mekorot raised NIS 420 million with a negative yield to maturity of 0.32% and a spread of 1.19% over government bonds. In Series 11, it raised NIS 762m. at a CPIlinked yield of 1.76 %% at a spread of 1.55% over indexed government bonds.
The bonds were rated AAA by
S&P with a stable horizon. The move was made on the basis of the shelf prospectus published by Mekorot in May 2019, when the leaders of the move were Discount Underwriting and Poalim IBI, and the demand received in the tender reached NIS 2.3b.
Mekorot has been ranked at the maximum credit rating of ilAAA for 19 consecutive years. Until 2018, its investments in the water economy had reached only NIS 800m. per year, but with the signing of the reform in 2019, the investment plan was increased to NIS 1.5b. per year.
Mekorot completed the debt raising after the public phase on Tuesday.
“Mekorot has received the investors’ trust in challenging market conditions,” Mekorot CFO Ronit Zalman-Malach said. “Mekorot’s bonds are a significant anchor for investment managers, including the public’s long-term savings.”
Incoming Mekorot CEO Amit Lang said: “The debt raising is another step in the implementation of the government decision regarding the reform of the company. Mekorot has a three-year development plan with projects to be carried out with a minimum annual volume of NIS 1.5b., so that the funds raised will allow the company to continue the momentum of developing the water sector, including supplies to neighboring countries.”
Mekorot chairman Yitzhak Aharonovich said: “The successful IPO is expected to help Mekorot meet the goals of the development of the water sector while maintaining the company’s strength and financial robustness. We thank the investors for their great trust and are preparing to expand the water infrastructure throughout the country.”