According to people close to the issue, foreign underwriters are expected to receive orders from other large customers tomorrow, which will increase the volume of demand from abroad to more than $ 4 billion. In addition, investors are expected to inject demand of close to $ 1 billion today and tomorrow. The total demand volume is around $ 5 billion.
The offering includes four series of bonds to be repaid in 2023, 2025, 2027 and 2030. Each series will have a minimum volume of $ 500 million, and may grow slightly depending on the segmentation of demand.
The issue is led by foreign underwriters JPMorgan and HSBC, and three local underwriting companies coordinate the orders in Israel: Lider, Barak Capital and Valio Base. The four new bond series will be secured by a lien on the rights of Delek Drilling in the Whale Gas Reservoir, and have therefore been named Whale Bond.
In response to reports on the subject, sharp price increases were recorded today in the securities of the various partnerships in the Whale Reservoir. Delek Drilling and Ratio’s participation units increased by 8% and 10%, respectively, while Delek Drilling’s A bonds increased by about 2%, completing a jump of about 17% from the beginning of June. This jump reduced the annual return To the redemption implied in the first bond of Delek Drilling to 8.3%.
Prior to the IPO, Delek Drilling received a preliminary international rating of BB from the British rating company Fitch, raising up to $ 2.5 billion. However, according to those close associates, an expansion of the maximum scope is not expected at the moment, due to Delek Drilling’s goal of achieving the best pricing for it.
The new bonds will be secured by a lien on the full rights of Delek Drilling in the Leviathan gas project, including a 45.34% holding in Leviathan shares, the district sales revenue, the joint operating agreement, a share in the project assets and more. After the issue is completed, the bonds will be traded abroad. And in the “institutional continuum” system of the Tel Aviv Stock Exchange.
The issue funds will be used primarily to repay loans and financial liabilities to banks and other lenders, totaling $ 2.16 billion (principal and interest). Another $ 100 million will be used to finance the repurchases of bonds from the other series, with $ 50 million to be allocated for the repurchase of unsecured Series A bonds, while $ 50 million will be allocated for the repurchase of Tamar Bond bonds.
The good news about the expected success in the issuance of a whale bond also had a positive effect on the Delek Group, which owns about 55% of Delek Drilling.
By Tuesday, the Delek Group is expected to complete raising NIS 163 million in a share issue, which it undertook to carry out as part of the agreement with its bondholders. Today, the company published the off-the-shelf offer report, according to which 2.2 million shares Options that can be exercised for shares.
The shelf proposal also indicates that between 50% and 75% of the issue proceeds will be used to repay the debts to the banks, based on the changes made to the trust deeds of Delek Group’s bonds. The balance of the debt to the banks currently stands at NIS 392 million, with 432.49 million participation units of Delek Drilling worth NIS 1.93 billion being pledged in their favor.
The Delek Group owes NIS 5.89 billion to the bondholders, in terms of the fund. 130.73 million of Delek Drilling’s participation units worth NIS 583 million are currently pledged in their favor. For bondholders to 40% of drilling fuel.