Israel’s Electric Corporation has raised $1.25 billion in a global bond offering. The bonds were issued in Europe and the U.S.
The money raised will be used towards paying off old debt of approximately $18 billion. That is no small sum for a public utility that operates in a small country like Israel.
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IEC had been under a great deal of public scrutiny in Israel lately due to accusations of mismanagement and cronyism at the state run company. Israelis complain of high electric bills while the company’s employees all receive free electricity in their homes.
The bonds, which will be traded on the Tel Aviv Stock Exchange, offer a 5% coupon and will mature in November 2024. They are part of a $5 billion global medium-term note program. $2 billion was already raised in 2008 and 2009 and $1.4 billion was raised by the company in 2013.
In a statement released today the company said that it raised twice the funds that it had initially planned as a result of increased demand.
“Taking part in the issuance, for the first time, were some of the world’s biggest institutional bodies and with very high demand, ” Chief Executive Eli Glickman said in a statement.
“Some of the world’s largest institutional bodies took part in the offering for the very first time with very high demand. The timing of the offering was perfect and contributed greatly to the excellent results, ” he added.
IEC Chairman Yiftah Ron-Tal said, “The excellent results of the offering demonstrate the large faith that leading global institutional investors have in the IEC.”