Habas Investments Bonds, Shares Soar on Nieuwe Refinancing Talks

Habas H.Z. Investments (1960) (HBS) bonds jumped, sending the yield down the most on record, as the Israeli investment company said it was in talks to refinance debt related to its investment in Nieuwe Steen Investments NV. (NISTI)

The yield on the 180 million shekels ($50 million) of 5 percent notes due August 2018 plunged 653 basis points, or 6.53 percentage points, to 43.09 percent at 3:36 p.m. in Israel. Shares of the Tel Aviv-based company jumped 28 percent, paring the slump in the past 12 months to 84 percent.

Habas is in discussions with third parties to refinance its 20.5 percent investment in Hoorn, Netherlands-based Nieuwe Steen, it said in a Tel Aviv bourse filing today. Habas in a March filing raised “significant doubts” that it will manage to make debt payments in May and August. The company, which also develops real estate, is in talks with New York’s KKR & Co. (KKR) for a loan of 73 million euros ($97 million), daily Calcalist reported earlier today.

“A new loan with better covenants and conditions could provide the company with some free cash flow and serve to finance its current operations for the short term,” Adar Etzioni, head of research at Migdal Capital Markets Ltd. in Tel Aviv, said today by phone.

Nieuwe Steen shares have slumped 31 percent in the past year. Habas said in the March filing that the drop in shares of the Dutch company is impeding on its ability to repay debt. A spokeswoman for Habas, who asked not to be identified because of company policy, declined to comment on the report.

To contact the reporter on this story: Sharon Wrobel in Tel Aviv at swrobel4@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.