Nofar Energy Plans $130 Million Preferred Share Offering Amid Market Downturn

The Tel Aviv Stock Exchange experienced a negative trading day, with the TA-35 index dropping 0.9% and the TA-125 index falling 1.1%. Renewable energy stocks were particularly hard hit, with Nofar Energy plummeting 9.3% as it prepares to raise NIS 500 million (approximately $130 million) through a preferred share offering. Other companies in the sector also saw significant declines, including Enlight Energy down 5.5%, and Doral down 8%. The TA Renewable Energy index lost 3.4%.

Nofar Energy is reviving plans for its preferred share issuance after a previous attempt was halted for further review of the instrument's characteristics. The company aims to raise NIS 500 million to bolster its equity without increasing its financial debt or diluting existing shareholders' voting power. Preferred shares offer cumulative dividends of 8.5% annually but do not grant regular voting rights or have a fixed redemption date. This type of security is common in the US market but less so in Israel, serving as a tool to reduce leverage without diluting existing shareholders.

The broader market also saw widespread declines, with 31 out of 36 stocks in the TA-35 index trading lower. Real estate stocks continued a prolonged slump, with the TA Real Estate index down 1.2% for its sixth consecutive day of losses. The TA CleanTech index also fell 2.1%.

Investors are awaiting key economic data, including Israel's August Consumer Price Index (CPI) to be released later today, and the US Federal Reserve's interest rate decision tomorrow evening. The market widely anticipates a 0.25% rate hike from the Fed, with a 92% probability. Long-term government bond yields remained stable, with the 10-year Israeli government bond yield at 3.982%.

In regulatory news, the Israel Securities Authority imposed a NIS 1 million fine on Psagot Investment House after an employee exploited his access to fund accounts to conduct coordinated trades with an associate, illicitly gaining NIS 1.3 million. Psagot, controlled by The Phoenix, has compensated affected unit holders.