Our Debt

Highlights

Financial management
From the beginning of 2019 to the date of release of this report, the Company has raised approx. ILS 1.9 billion. The Company has financial flexibility in raising debt on good terms and with long duration, which assists the Company in its continued initiation, betterment and development of additional projects and seizing of business opportunities.
The guiding principles in the management of the financial debt are:
1. Preservation of liquid balances.
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.

Financial challenges
The leveraging reduction in recent years has contributed to the reduction of the Company’s risks along with the preservation of a leverage ratio that allows for business development and improvement of the return on equity, and has also improved the Company’s position on entering the COVID-19 crisis.

As specified in the chapter on the effects of the outbreak of COVID-19, the Company has taken several measures to increase liquidity with the aim of allowing for greater flexibility in addressing the crisis.

The Company continues to consider its steps and continues to examine options for raising debt on the capital market (also see page 20 of this Board of Directors’ Report with respect to the examination of the possible issuance and listing of a new bond series (Series S secured by a second mortgage on HaKiryon Ofer Mall), in order to reduce financing costs while extending the duration of the debt, as it has done over the past six months when raising debt by Series R, J and N Bonds.

As noted in the chapter on the effects of the outbreak of COVID-19, as of the date of this report, the Company has made preparations with cash and cash equivalents and with approved credit facilities in the amount of approx. ILS 2.1 billion against a debt service of ILS 1.1 billion until the end of the year.

The financing ability component is 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

The Company has unmortgaged properties in the value of approx. ILS 6.1 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. 59%.

*) After the date of the balance sheet, the Company increased its credit facility against the Ramat Aviv Mall (see section on the effects of the COVID-19 outbreak). Insofar as it shall be fully utilized, the ratio of the debt against which the Ramat Aviv Mall is encumbered will increase from approx. 26% currently to approx. 34% of the property’s value as of the date hereof.