Azorim 2021 Bond Yield Drops Most on Record as Demand Triples

Azorim-Investment Development & Construction Co.’s bonds gained, pushing the yield down the most on record, after investors sought more than three times the amount available of the Israeli company’s debt.

The yield on 250 million shekels ($68 million) of 5.35 percent notes due in December 2021 fell 33 basis points, or 0.33 percentage point, to 4.49 percent at the close in Tel Aviv. The shares slipped 0.8 percent to 3.57 shekels.

The Tel Aviv-based developer said today it may increase its debt offering after receiving 481.8 million shekels of early bids for a 150 million-shekel tender. Moody’s Midroog today raised the debt amount rated A3, the seventh-highest investment grade, to 220 million shekels. The Bank of Israel, which is due to hold its next interest rate-setting meeting on May 27, this month unexpectedly cut the lending rate to 1.5 percent, the lowest level in three years.

“The low interest-rate environment is catalyzing aggressive investor demand in corporate debt sales,” said Adar Etzioni, head of research at Migdal Capital Markets Ltd. in Tel Aviv by phone. “Azorim is taking advantage of the momentum to lower financing costs and to repay debt.”

The company in February raised 250 million shekels via a debt sale and 120 million shekels via a rights offering earlier this year. Bezeq Israeli Telecommunication Corp. today increased its private debt offer to 870 million shekels from 600 million shekels after the country’s largest phone service provider received demand for 1.2 billion shekels.

One-year interest-rate swaps, an indicator of investor expectations for rates over the period, dropped 7.5 basis points to 1.25 percent.