Ampal-American Israel Corporation (NASDAQ: AMPL) announced today that Midroog Ltd. ("Midroog"), an affiliate of Moody's Investors Service, has downgraded Ampal's Series A, Series B and Series C Debentures (the "Debentures") ratings by one notch to BAA1 from A3, and classified its outlook as negative. The Debentures remain on Midroog's "Watchlist”. In its report, Midroog stated that the downgrade was due to the on-going geo-political environment uncertainties in the region in which East Mediterranean Gas Company S.A.E. (“EMG”) operates, and is further substantiated by the downgrade of the State of Egypt's credit rating. Midroog noted that EMG constitutes a substantial portion of Ampal's portfolio and factors significantly into Ampal's expected future cash flow. Midroog also noted that as announced, since February 5, 2011, the gas supply from Egypt to Israel has been halted, and resumption is expected no later than March 4, 2011. The Debentures’ ratings will remain on Midroog's "Watchlist" until it becomes evident that continuous gas flow can be sustained over a period of time. Midroog further stipulated that the current rating does not reflect a situation in which gas supply will not resume shortly. Midroog further estimates that the aforesaid might have an effect on Ampal's total assets and financial stability to a degree that cannot currently be estimated. However, Midroog believes the closing of the sale of 012 Smile will substantially benefit Ampal's liquidity, and will improve risk assessment on a short term basis. Mr. Yosef A. Maiman, Chairman, President and Chief Executive Officer of Ampal commented on Midroog's report: "I believe that the downgrading of Egypt's credit rating should have no implication on EMG's business risk profile, as Egypt's interest in foreign currency income remains." Mr. Maiman continued: "In recent months, Ampal's asset value and liquidity has increased. Furthermore, the market yield of Ampal's Debentures reflect the public's trust in Ampal, its subsidiaries and the resumption and continued gas supply by EMG."
About Ampal:Ampal and its subsidiaries acquire interests primarily in businesses located in the State of Israel or that are Israel-related. Ampal is seeking opportunistic situations in a variety of industries, with a focus on energy, chemicals, communications and related sectors. Ampal’s goal is to develop or acquire majority interests in businesses that are profitable and generate significant free cash flow that Ampal can control. For more information about Ampal please visit our web site at www.ampal.com. Safe Harbor Statement Certain information in this press release includes forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934) and information relating to Ampal that are based on the beliefs of management of Ampal as well as assumptions made by and information currently available to the management of Ampal. When used in this press release, the words "anticipate," "believe," "estimate," "expect," "intend," "plan," and similar expressions as they relate to Ampal or Ampal's management, identify forward-looking statements. Such statements reflect the current views of Ampal with respect to future events or future financial performance of Ampal, the outcome of which is subject to certain risks and other factors which could cause actual results to differ materially from those anticipated by the forward-looking statements, including among others, the economic and political conditions in Israel, the Middle East, including the situation in Iraq and Egypt and the global business and economic conditions in the different sectors and markets where Ampal's portfolio companies operate. Should any of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results or outcome may vary from those described herein as anticipated, believed, estimated, expected, intended or planned. Subsequent written and oral forward-looking statements attributable to Ampal or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements in this paragraph. Please refer to the Ampal's annual, quarterly and periodic reports on file with the SEC for a more detailed discussion of these and other risks that could cause results to differ materially. Ampal assumes no obligation to update or revise any forward-looking statements.