mers with a pleasant, healthy and safe shopping experience, and present improved business results in 2022.
From the beginning of 2021 until the report release date, the Company has raised approx. ILS 2.8 billion in bonds. The Company has financial flexibility in debt raising with good conditions and long average duration, which also proved itself during the Covid-19 crisis, which further the Company’s continued initiation, betterment and development of additional projects and taking advantage of business opportunities.
The leading principles in management of the financial debt are:
1. Maintaining liquidity advantages.
2. Lowering the financing costs.
3. Extending average duration of the debt,
4. Maintaining a strong and stable balance sheet.
5. Maintaining a high rating.
The Company’s debt includes: Publicly-traded bond series, private loans from institutional bodies, loans and credit facilities from banking sources and commercial paper.
The Company’s Financial Leverage
The decrease of leverage in recent years contributed to the decrease in the Company’s risks alongside maintenance of a leverage ratio which allows for business development and improvement of the return on equity.
In the Company’s opinion, a loan-to-value-ratio (LTV) of approx. 50% is right for the Company. The Company’s current leverage rate is approx. 41.8%. The decrease in the leverage rate compared with December 31, 2021 is mainly derived from the Company’s operating cash flow and the positive revaluation of the real estate.
In recent years, the Company has made it a priority to lower financing costs while extending average duration of the debt.
During the next four quarters, the Company has debt repayments in the sum of approx. ILS 1.23 billion.
As of June 30, 2022, the Company had a cash reserve and portfolio of financial assets available for immediate liquidation totaling approx. ILS 1.29 billion
As of June 30, 2022, the net debt balance is ILS 8.4 billion .
The financing component is one of the main factors of the Company’s success. Through diversification of the sources of financing and maintenance of high liquidity, the Company can continue its development momentum and succeed in periods of crisis like the one that the world is currently experiencing.
Total Blended Cost of Debt
The following specifies the weighted effective cost of debt (real interest recorded in profit and loss) and the nominal cost of debt (cash flow interest paid on the debt) as of the date of the statements and over the period of repayment of the group’s financial liabilities.
Breakdown of Mortgaged Property Value (Owners’ Share)
The Company has unmortgaged properties in the value of approx. ILS 8.4 billion, and some ILS 1.3 billion in mortgaged properties, against which credit facilities have been issued but which are entirely unused as of the balance sheet date, and can therefore be immediately released from the mortgage.
For the mortgaged properties, there is potential to expand the debt since the ratio of the value of the collateral to the secured debt is approx. 57% on average, while it can be increased to up to 70%-80%.