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PADICO closes its First Corporate Bonds Issuance with $85 million

2011-09-29

RAMALLAH, September 28, 2011(WAFA) – The Palestinian holding company, Palestine Development and Investment Company (PADICO), Wednesday announced the successful closure of its bonds issuance with an oversubscription of USD$ 85 million, with a USD$ 15 million surplus on top of the initial USD$ 70 million original offering.

 Most of the bond holders are banking institutions operating in Palestine and the Palestinian Monetary Authority, the equivalent of the Central Bank in Palestine.

In accordance with regulations, the Bond certificates were distributed to their holders and the surplus was distributed among all the subscribed banking entities, allowing for the first General Assembly for the bond holders to convene in Ramallah today. The Assembly elected Arab Bank as the bonds Custodian to represent the interest of all the bond holders and continue proceedings with the issuing company to ensure compliance with the bonds placement prospectus.

Munib Masri, Chairman of PADICO Holding expressed his appreciation for the regulatory authorities in Palestine for creating the proper environment that enabled the bond issuance and facilitated the fairly speedy placement of the issued bonds, given the novelty of the whole bond issuance experience in Palestine.

Masri said” that the issuance places Palestine at par with other countries in the region in terms of having mature markets and an appetite for financing long term tools. We are also pleased to know that confidence in PADICO’s outlook enabled the oversubscription by the banking community during a time when political uncertainty still engulfs our region. This is a statement of confidence both in the financial prospects of PADICO Holding and in the country’s future economic outlook,” added Masri.

Samir Huleileh, CEO of PADICO Holding reiterated the important signal this oversubscription echoes to local and international investors. “This is a measurement of confidence by the local financial community in the long term investment strategy of PADICO Holding and the strength of its financial performance and cash flow projections.”

Huleileh also highlighted the fact that there is a second message reference the maturity and readiness of the local financial markets to issue such sophisticated financial instruments. He also noted that the subscription in corporate bonds will impact positively the value of the company shares on the Palestine Exchange given the confidence given by bond holders in the company’s long term plans.

Huleileh went on to add “we at PADICO Holding have chosen to finance our long term mega projects with this instrument due to its long term maturity life; which is better suited to meet our financing needs on the long run due to we are planning for the long haul and we expect that this financing instrument will enable us to better finance at more competitive rates our thrust into creating several of our strategic projects which include: the new recycling project in Gaza, the Water Desalination project in Gaza; the mammoth real estate development in Jericho and the energy plant in the northern West Bank.”

The holders of PADICO corporate bonds are: Palestine Monetary Authority, Arab Bank, Bank of Palestine, Capital Bank, Palestine Commercial Bank, Union Bank, Jordan Kuwait Bank, Alrafah Microfinance Bank, Cairo Amman Bank, and Bank of Jordan.