The regulator wants to know how the real estate company will repay its bonds, which are traded at junk bond levels.
The Israel Securities Authority has ordered Lito Group Ltd. (TASE: LTGR) to detail how it plans to repay the bonds issued by the company and its subsidiary Lito Real Estate Ltd. (TASE:LTRE.B1). The bonds are traded at junk bond levels: Lito Group Series A bonds bear 42% and Series B bonds bear 35%.
In a notice to the Tel Aviv Stock Exchange (TASE) in response, Lito Group outlined two alternative repayment schedules: repayment from current operations and from the expected sale of properties. The aggregate debt of the three bond series is NIS 152.1 million.
The request by the Securities Authority is seen as a clarification measure, since Lito Group’s bonds are traded at very high yields, implying that repayment could be problematic. Nonetheless, it cannot be ruled out that the Securities Authority will order other companies to release similar reports in order to ensure that the Heftsiba Building Development & Investments Ltd. debacle will not recur.
Published by Globes [online], Israel business news - www.globes.co.il - on August 14, 2007
© Copyright of Globes Publisher Itonut (1983) Ltd. 2007