Corporate Bond Issuance Surges in Tel Aviv Amid Selective Investor Demand
The corporate bond market in Tel Aviv has seen record activity, with 31 billion shekels raised in June alone, marking a 121% increase from the previous year, according to Midroog. For the first half of 2026, bond issuances totaled 119 billion shekels, a 65% rise compared to the same period last year. This surge is driven mainly by institutional investors favoring bonds from large, established companies such as banks and insurance firms.
However, smaller and medium-sized real estate companies face significant challenges in completing bond offerings. Many of these firms seek to refinance expensive loans and owner pledges with lower-interest public bonds but struggle due to high leverage and difficulties in selling properties. Midroog CEO Avi Sternshus noted that while the bond market is active, it has become more selective, with investors demanding higher yields and collateral from smaller or unrated companies amid economic uncertainty.
In recent months, about 14 companies, mostly in real estate development, submitted prospectuses for initial bond issuances, but only six have succeeded so far. For example, Amim Initiatives raised 188 million shekels at 7.2% interest, mainly to repay high-cost loans, while Avigam Group secured 207 million shekels at a lower 3.5% rate backed by a property in Ashdod. Smaller firms like S.Y. Leonardo and Ram Mugrabi raised 45 million and 76 million shekels respectively, at higher interest rates.
Several companies are still awaiting bond issuance approval, but some may not succeed due to market skepticism. Investors prefer projects in advanced stages and avoid early-stage developments, especially in Tel Aviv, where property sales have slowed. Companies with problematic track records, such as Nitzanim Holdings controlled by Meir Davidy, face doubts about completing their bond offerings. Other notable issuers include Dankner Kanlov, Stern Versano Engineering, and Barclays Hotels, which plans to raise 400 million shekels to refinance bank and non-bank loans.
The market's preference for larger, stable companies over smaller, riskier ones reflects broader investor caution amid economic uncertainty and challenges in the real estate sector, particularly in urban renewal projects and high-leverage firms.
