Midroog Ltd. Confirms Baa1 Rating for Internet Gold’s Series C Debentures
and Revises the Company’s Outlook From Negative to Stable
RAMAT GAN, Israel -- November 17, 2013
Internet Gold - Golden Lines Ltd. (The: "Company") announced today that
Midroog Ltd., an Israeli rating company affiliated with Moody’s (“Midroog”)
confirmed the Baa1 rating in connection with the Company’s recent NIS 60
million issuance of additional Series C Debentures.
Midroog confirmed the rating with respect to a total possible issuance of up
to NIS 125 million of Series C Debentures and also raised the Company’s
outlook from negative to stable. The proceeds of the issuance will be used to
support the Company's immediate and long-term liquidity needs.
According to Midroog, the additional issuance of Series C Debentures will
provide the Company with a stable liquidity cushion for the expected future.
The Baa1 stable rating takes in to account the recent issuance of NIS 60
million par value of Series C Debentures and the Company's ability to issue an
additional NIS 65 million par value in the future, in accordance with the
In its rating report, Midroog stated that the stabilization of the Company’s
prospects reflects the expected improvement in the Company’s repayment ability
as a result of, among other things, the modifications to the Company’s
subsidiary, B Communications Ltd. ("B Communications"), financing agreement
with a consortium of Israeli banks and the dividend that B Communications
announced lately and which is payable in December 2013.
Midroog added that the stable rating is supported both by the Company’s
independent ability to repay its debt and by the strong financial profile of
Bezeq, which is expected to continue to produce steady cash flows for the
short and medium terms.
Midroog also noted the positive decrease in the Company’s leverage ratio
during the past year, mostly due to a significant increase in the share value
of B Communications and Bezeq. Midroog also noted the downgrade of the
Company’s risk premium which enables the Company, to take advantage of the
current issuance potential in the market.
As negative factors, Midroog noted the Company’s inferior holding structure,
the possible fluctuation in B Communications’ share price, and its partial
dependence upon receiving dividends from B Communications.
The above description of Midroog’s report is only a summary of the main points
and it should not be relied upon as a complete description of the full report.
The full and report can be viewed at http://maya.tase.co.il.
Mr. Doron Turgeman, the Company’s CEO commented, “We are very pleased with
Midroog’s rating report which speaks for itself. Our current liquidity is
sufficient, based on the assumptions of our current work plan, to fully
service our debt until 2016. We remain exceedingly confident regarding Bezeq’s
position in Israel’s communications market and continue to look for new
opportunities to improve our financial flexibility and cash flow position."
The Israeli Tax Authority approved the formula for calculating the adjusted
discount rate for all Series C Debentures, for tax purposes. According to the
principles set out by the tax authority, as a result of the private placement,
the adjusted discount rate for all Series C Debentures is 2.23%. The adjusted
discount rate is calculated solely for the purpose of withholding tax in
connection with the discount amount upon repayment of the Series C Debentures
and it does not reflect the final tax liabilities of Series C bondholders.
About Internet Gold
Internet Gold is a telecommunications-oriented holding company which is a
controlled subsidiary of Eurocom Communications Ltd. Internet Gold’s primary
holding is its controlling interest in B Communications Ltd. (TASE and Nasdaq:
BCOM), which in turn holds the controlling interest in Bezeq, The Israel
Telecommunication Corp., Israel’s largest telecommunications provider (TASE:
BZEQ). Internet Gold’s shares are traded on NASDAQ and the TASE under the
For more information, please visit the following Internet sites:
This press release contains forward-looking statements that are subject to
risks and uncertainties. Factors that could cause actual results to differ
materially from these forward-looking statements include, but are not limited
to, general business conditions in the industry, changes in the regulatory and
legal compliance environments, the failure to manage growth and other risks
detailed from time to time in the Company's filings with the Securities
Exchange Commission. These documents contain and identify other important
factors that could cause actual results to differ materially from those
contained in our projections or forward-looking statements. Stockholders and
other readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date on which they are
made. We undertake no obligation to update publicly or revise any
Internet Gold - Golden Lines Ltd.
Idit Cohen, IR Manager
Investor relations contacts:
Mor Dagan, Investor Relations
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