Generation Capital Raises NIS 1.2 Billion in Bond Offering

Infrastructure investment fund Generation Capital has successfully completed the institutional phase of a new bond offering, raising NIS 1.2 billion. The fund received bids totaling approximately NIS 1.6 billion from major institutional investors. This significant debt raise is a key step in bolstering the fund's financial standing as it prepares to finalize its acquisition of Shikun & Binui Energy.

The newly issued, unsecured, CPI-linked bonds carry an annual interest rate of 3.48% and have an average life of about eight years. Principal repayments are scheduled in ten equal installments between 2030 and 2039, with interest payments beginning in December 2027. S&P Maalot assigned the bond series a high rating of A+ with a stable outlook, and the public offering phase is expected soon.

This move follows a series of aggressive financial actions by Generation Capital in recent months, including a NIS 1 billion stock issuance in June and the introduction of institutional investors into its subsidiary PowerGen, its primary energy arm. These efforts are aimed at securing financing for the acquisition of Shikun & Binui Energy, a deal valued at NIS 4.45 billion signed in late July after a competitive bidding process against competitor Keystone Fund. The acquisition is anticipated to be completed in 2027, pending regulatory approvals from the Competition Authority and the Electricity Authority.

The successful bond issuance coincides with strong financial results for Generation Capital. In the first half of the year, the fund reported a pre-tax profit exceeding NIS 1 billion and a 70% surge in net cash flow from investments, reaching NIS 112 million. The total value of the fund's investments has grown to NIS 5.8 billion, with equity at approximately NIS 4.9 billion. The management has set an ambitious target of distributing around NIS 100 million in dividends in the coming year.