Palestinian firm issues $70m corporate bonds
Ramallah (Palestine), May 13, 2011
Palestine Development and Investment Limited (Padico) Holding, a leading investment company, said it has successfully issued the country's first corporate bonds at a total par value of $70 million.
The Palestinian financial services sector has not previously witnessed the issuance of any form of bonds or other long term financing tools specialized in project financing outside the existing customary bank loans.
The bonds are set to be privately placed and will not be listed nor traded on the Palestine Exchange (PEX), said a statement from Padico.
Several banks and financial institutions have expressed notable interest and commitment to purchase Padico's bonds, which led to an oversubscription, it added.
Such interest reflects high confidence in the company's repayment abilities and the long term sustainability of its investment portfolio, especially given its strong track record in mitigating local political risk.
As a long-term financing tool, the bonds represent a highly suitable financing option for Padico's investment strategy which targets medium and long term strategic projects.
The bond issuance will grant the company adequate levels of liquidity for funding its new projects that require sometime to become income generating.
Padico will issue 7,000 bonds of senior debt secured by specific assets with a total value of $70 million. Par value per bond equals $10,000, and minimum subscription amounts to 10 Bonds with a total amount of $100,000.
Dr. Salam Fayyad, the Palestinian Prime Minister, confirmed the significance of this bond issuance stating: 'We believe that the issuance of corporate bonds by the private sector is a true milestone for Palestine's financial services sector.'0
'We are also proud that Padico and the private sector have preceded the public sector in issuing the first Palestinian bonds, which represents a sign of agility and progressiveness.'
Munib R. Masri, Padico chairman said 'This bond issuance represents our long-term vision and commitment to investing in Palestine, and reaffirms our confidence in the local economy.'
'We have conducted business in Palestine despite the political risk involved, and we have maintained an impressive track record of financial performance.'
Padico CEO Samir Hulileh said the bond issuance greatly supports Padico's strategic plans and future directions.
'Diversifying our financing schemes, and matching our investments with the incoming cash flows will enable us to fund long term and strategic projects while reducing dependency on short term bank loans. This new financing scheme will also allow us to adopt a consistent dividend policy,' he added.
Padico, he said, plans to establish several mega projects in the coming period, such as a power generation project in northern West Bank at a total cost of $300 million, and a large scale tourism and real estate development project in Jericho.-TradeArabia News Service