Bezeq has signed an agreement for a future placement of its series 9 bonds, and has secured a NIS 600 million bank loan
Against the background of the uncertainty about the future of controlling shareholder Shaul Elovitch, Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) reported to the Tel Aviv Stock Exchange that it would be expanding its series 9 bond issue by NIS 578 million, and that it had secured a NIS 600 million loan
Bezeq has signed an agreement with several financial institutions under which they committed to buy series 9 bonds from the company in a private placement. The placement will be on December 2, 2018, of NIS 550 million par value, with the total proceeds being NIS 578 million
The price in the placement will be NIS 1.05 for one bond, giving an annual yield of 2.7%. Bezeq will pay the buyers a commitment fee. The stock market price of the bonds is higher, about NIS 1.1. The series 9 issue is not index-linked, and bears an interest rate of 3.65%. It was first issued in early 2015. It is due for repayment in four unequal payments: 10% in December 2022, and 30% on December 1 in each of the years 2023, 2024, and 2025. Interest is payable on June 1 and December 1 annually until 2025
The private placement is subject to several preconditions, including that expansion of the bond series will not lead to a downgrade of its rating. After the expansion of the series, it will total NIS 2.1 billion
Within the past few months, Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) and Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) have signed similar agreements for future expansion of existing bond series
In addition, Bezeq has obtained a NIS 600 bank loan, with a duration of 6.7 years and at a fixed interest rate of 3.2%
On Sunday, the controlling shareholder in Bezeq, Shaul Elovitch’s Eurocom Communications, applied to the court for approval of the arrangement it reached with its creditor banks whereby Naty Saidoff will take over Eurocom
Under the proposed arrangement, Saidoff will inject NIS 400 million into the company. In addition, debt of NIS 350 million owed by Eurocom Communications will be rescheduled, and the balance of its debt, some NIS 150 million, will be repaid on the basis of future upside