Negev Building Products Plans 100 Million Shekel Bond Issue Amid Shekel Strength
Over the past two months, the Tel Aviv Stock Exchange has seen a record wave of new listings, with 11 companies going public and raising a combined 21.5 billion shekels. Despite some last-minute cancellations, this surge marks a peak in the local equity market. However, the bond market has been less consistent, with only 6 out of 14 companies completing bond issuances after filing prospectuses recently.
Negev, formerly Negev Ceramics and controlled by businessman Yariv Lerner and Viola Credit investment fund, is expected to join these companies by issuing bonds worth 100 million shekels. This will mark Negev's return to the TASE after 14 years since it was delisted. The bonds will carry an annual interest rate of up to 6.9%, non-linked, and the proceeds will be used to repay expensive bank and non-bank credit debts.
Negev operates in the import, marketing, distribution, and sales of home design products, including finishing materials, porcelain tiles, ceramics, and sanitary ware. Founded in 1969 and first public in 1987, the company was delisted in 2012 after being acquired by Africa Israel Industries. It later faced financial distress, including a debt restructuring that wiped out over 400 million shekels in bank debt. Since 2017, Yariv Lerner and Viola Credit have owned the company.
In Q1 2025, Negev reported revenues of approximately 117.6 million shekels, a 3% increase year-over-year, driven by growth in private customer sales despite partial store closures during Operation Guardian of the Walls. The company posted a net profit of 4.4 million shekels, reversing a prior loss of 2.6 million shekels, helped by the shekel's appreciation against the dollar and euro, which reduced costs and financing expenses. For the full year 2025, Negev expects revenues of 460 million shekels and a profit of 6.1 million shekels, compared to a small loss in 2024.
Negev's bond issuance will join three other recent real estate bond offerings in the local market, including S.Y. Leonardo's 45 million shekel bond at 7.9% interest, Amim Yizamut's 188 million shekel bond at 7.2%, and Avigam Group's 207 million shekel bond at a lower 3.5% interest. These real estate companies are using proceeds to finance projects and refinance expensive loans.
The bond market's mixed results contrast with the strong equity issuance trend, reflecting ongoing challenges and opportunities in Israel's capital markets.
