PADICO HOLDING Announces the Issuance of the First Corporate Bonds in Palestine at a par Value of $70 Million

RAMALLAH, Palestine, May 11, 2011 /PRNewswire/ -- PADICO HOLDING, a leading investment company operating in the Palestinian territories, announced today that it has successfully issued the first corporate bonds in Palestine, at a total par value of USD 70 million. The Palestinian financial services sector has not previously witnessed the issuance of any form of bonds or other long term financing tools specialized in project financing outside the existing customary bank loans.

The bonds are set to be privately placed and will not be listed nor traded on the Palestine Exchange (PEX). Several banks and financial institutions have expressed notable interest and commitment to purchase PADICO HOLDING's bonds, which led to an oversubscription. Such interest reflects high confidence in the company's repayment abilities and the long term sustainability of its investment portfolio, especially given its strong track record in mitigating local political risk. As a long term financing tool, the bonds represent a highly suitable financing option for PADICO HOLDING's investment strategy which targets medium and long term strategic projects. The bond issuance will grant the company adequate levels of liquidity for funding its new projects that require sometime to become income generating.

PADICO HOLDING will issue 7,000 bonds of senior debt secured by specific assets with a total value of USD 70 million. Par value per bond equals USD 10,000, and minimum subscription amounts to 10 Bonds with a total amount of USD 100,000. The bonds' maturity is 5 years following the issue date, with an annual fixed interest rate of 5% for the first 30 months (2.5 years), and a variable annual interest for the subsequent 30 months (2.5yars) equal to 6 months US LIBOR + 2.5%, with a floor of 5 % and ceiling of 6.50%.

Dr. Salam Fayyad, the Palestinian Prime Minister, confirmed the significance of this bond issuance stating: "We believe that the issuance of corporate bonds by the private sector is a true milestone for Palestine's financial services sector. We are also proud that PADICO HOLDING and the private sector have preceded the public sector in issuing the first Palestinian bonds, which represents a sign of agility and progressiveness."

Munib R. Masri, PADICO HOLDING's Chairman stated that "This bond issuance represents PADICO HOLDING's long term vision and commitment to investing in Palestine, and reaffirms our confidence in the local economy. We have conducted business in Palestine despite the political risk involved, and we have maintained an impressive track record of financial performance."

"This Bond issuance greatly supports PADICO HOLDING's strategic plans and future directions. Diversifying our financing schemes, and matching our investments with the incoming cash flows will enable us to fund long term and strategic projects while reducing dependency on short term bank loans. This new financing scheme will also allow us to adopt a consistent dividend policy," said Samir Hulileh, PADICO HOLDING's CEO.

PADICO HOLDING plans to establish several mega projects in the coming period, such as a power generation project in northern West Bank at a total cost of USD 300 Million, and a large scale tourism and real estate development project in Jericho.

    
    Contacts:

    PADICO HOLDING
    Nur Nasser Eddin
    Head of Investor Relations
    Email: nur@padico.com
    Tel: +970-2-2403336