July 28--The tender for an issue of Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1) bonds to investment institutions has been successful. Results of the tender published today show that investment institutions submitted preliminary undertakings to purchase bonds totaling NIS 1.6 billion in par value. NIS 450 million of those undertakings was at a spread of no more than 0.95% above the Bank of Israel interest rate.
In an offering to the public, this spread constitutes the maximum spread for the bonds. The final spread will be determined in the offering to the public. The bonds issued are Series D (new series). The principal and interest on the bonds are not linked to the Consumer Price Index or any currency whatsoever, and the bonds will be repaid in three annual payments in 2021-2023.
Standard & Poor's Maalot Ltd. granted the new IAI bond series for raising up to NIS 525 million in par value an ilAA rating. The huge bond issue is getting underway in the shadow of Operation Protective Edge in the Gaza Strip, which has caused the postponement of a number of debt offerings by small companies with relatively low ratings.
Founded in 1953, IAI is a fully owned state company that develops, sells, and maintains military and civilian aircraft. Most of IAI's output, 78%, is designated for exports. 73% of its output is sold to the military market and 27% to the civilian market.
IAI's revenue totaled $3.6 billion in 2013 and $1 billion in the first quarter of 2014. Its orders backlog in the first quarter amounted to $9.8 billion.
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