Our Debt

mers with a pleasant, healthy and safe shopping experience, and present improved business results in 2021.

Highlights

Financial Management

From the start of 2019 and through to the time of release of this report, the Company raised bonds totaling approx. ILS 2.5 billion and took loans amounting to approx. ILS 0.9 billion. In the Company’s opinion, it has financial flexibility for raising debt on good terms and with long duration, which assists the Company in continuing to initiate, upgrade and develop additional projects and exploit business opportunities.

The principles guiding our financial debt management are:

  1. Preservation of adequate liquid balances, particularly in view of these challenging times.
  2. Reduction of financing costs.
  3. Extension of debt duration.
  4. Preservation of strong and stable balance sheet figures.
  5. Preservation of high rating.

The Company’s debt includes: Marketable public bond series, private loans from institutional bodies, loans and credit facilities from banking sources and commercial paper.

The Company’s financial leverage

Leverage reduction in recent years has contributed to reducing the Company’s risks along with the preservation of a leverage ratio that allows for business development and improvement of the return on equity.

In the Company’s opinion, particularly in light of the challenging period, the right LTV ratio goal for the Company is approx. 50%. The Company’s current LTV is approx. 47.9% – the minor LTV increase recorded in 2020 is mainly due to a decrease in operating parameters resulting from the Covid-19 relief granted by the Company and from negative revaluation of real estate.

Financial challenges

Over the last few years, the Company has focused on reducing its financing costs while extending debt duration.

In the coming year, the Company has debt maturities totaling approx. ILS 2.3 billion (principal and interest) including final payment of the Series H bonds (which are guaranteed by a first-ranking mortgage on the Ofer Grand Canyon Mall Haifa) in January 2022.

The Company ended the year with a cash balance and a liquid financial asset portfolio of approx. ILS 1.3 billion. In addition, the Company has approved unused credit facilities of ILS 395 million. In addition, the Company has unmortgaged properties of approx. ILS 6.2 billion.

Financing abilities are one of the key parameters in the Company’s success. By diversifying financing sources and maintaining high liquidity, the Company is able to continue its development momentum and weather crises like the one presently experienced globally.

Rate of Current Payments of Principal Net of Secured Bullet Components

When repaying “bullet” components, given that the property mortgage ratios are considerably lower, the Company can consider releasing the property from the mortgage or refinancing the debt against remortgage thereof on favorable terms.

The financing component is one of the main factors in the Company’s success. By varying the sources of financing and maintaining high liquidity, the Company can continue its development momentum even during Covid-19.

Total Blended Cost of Debt

The following specifies the weighted effective cost of debt (real interest recorded in profit and loss) and the nominal cost of debt (cash flow interest paid on the debt) as of the date of the statements and over the period of repayment of the group’s financial liabilities.

Breakdown of Mortgaged Property Value (Owner’s Share)

The Company has unmortgaged properties in the value of approx. ILS 6.2 billion, as well as mortgaged properties in the value of ILS 0.7 billion, with respect to which credit facilities have been provided that are completely unused as of the balance sheet date, and which are available for immediate release from the mortgage.
The mortgaged properties harbor the potential for debt expansion, as the ratio of the value of the collateral to the secured debt is approx. 61%.