Monday, December 12, 2016

The Ticker: Delek Drilling, Avner Plan $400 Million Bond Issue - HAARETZ

Energy Minister Silvan Shalom (R) & Yitzhak Tshuva, the controlling
shareholder of Delek Group March 27, 2013 - by Moshe Binyamin
Dec 12, 2016 12:32 AM
Eran Azran

Delek Drilling, Avner plan $400 million bond issue
Delek Drilling and Avner, the two Delek Group firms with stakes in the Tamar and Leviathan offshore natural gas fields, are planning their first ever bond issue as limited partnerships. Unlike their 2014 “Tamar” bond, which was used exclusively in financing the gas field, the new issue will be for general corporate purposes – meaning it will be used to pay the companies’ shareholders (technically partners in a limited partnership) a dividend as required by securities regulations, minus deductions for corporate capital spending subject to shareholders’ approval.

Earlier this month, Delek and Avner said they planned a $100 million dividend for payment December 31. The bonds, which have a relatively high A1 rating from the Midroog agency, are payable in 2021. However, if the two companies reduce their combined 31.25% stake in Tamar to below 10.4%, they will have to immediately redeem half the bonds. Shares of Delek Drilling closed up 2.25% at 14.99 shekels ($3.93), while Avner rose 1.7% to 2.82.