Rafael Advanced Defense Systems has decided to launch a private bond issue of 500 million to 1 billion shekels, seeking to take advantage of the current thriving bond market, Globes said on Tuesday, quoting sources.
The Midroog rating agency is expected to rate the bonds AAA, the same rating Rafael had in previous bond issues.
The issue, set to take place in the coming weeks “is likely to reflect the sharp downturn in yields on government and corporate bonds over the past three years (the yield on five-year government shekel bonds is only 1.5 percent, and the yield on five-year government index-linked bonds is 0.2 percent),” Globes wrote.
In a 2016 review of the company by Midroog, the analysts wrote, “The company enjoys a high probability of state support, if necessary, which is a positive factor in the rating. Despite its orientation to the domestic market, Rafael has diversified its business with a variety of projects and territories, including developing markets with growth potential. In addition to its dominant missile sector, the company is allocating resources to future growth engines adapted to the current and future battlefield in communications, intelligence, information processing systems, defense systems and urban warfare solutions.”
Regarding liquidity, Midroog notes, “The company has an outstanding liquidity profile resulting mostly from advances from customers. In addition, the company has good financial flexibility due to unencumbered assets and good access to sources of financing.”