Bank Leumi has raised NIS 150 million through an issue of deferred notes to institutional investors. The round is in fact a sequel to the issue of some NIS 121 million worth of deferred notes from last week. The issues come to about NIS 500 million.
The Series C deferred notes carry 4.9% interest for the institutional investors. The notes are to be redeemed in one payment in 2016, but the institutional investors use them as a deposit substitute.
Complex capital instruments, such as deferred capital notes, incorporate both a capital and loan component. The instruments generate revenue from interest on a continual basis, but this income can be delayed and irregular over time.
Yesterday, Bank Hapoalim completed an issue of NIS 400 million worth of deferred capital notes to institutional investors. The issue was carried out through an interest tender. The interest was set at 7.45%, somewhat below the top interest in each of the notes series.
The highest interest the buyers were offered was 7.5%, and the lowest was 0.1%.
Together with this issue, Bank Hapoalim raised a total of some NIS 900 million worth of deferred capital notes, after in December raising about NIS 500 million from institutional investors.