Publication of Draft Agreement with Trustee for Potential New Israeli Debenture Series
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OR YEHUDA, Israel, Aug. 05, 2024 (GLOBE NEWSWIRE) -- Formula Systems (1985) Ltd. (“Formula”) published with the Tel Aviv Stock Exchange (the “TASE”) and the Israel Securities Authority (the “ISA”) a draft agreement with a trustee for a new series of secured, non-convertible debentures—Series D Debentures— that may potentially be issued by Formula in Israel. The Series D Debentures would be secured by a first lien on certain shares of certain publicly-traded subsidiaries held by Formula—specifically, Matrix IT Ltd., Sapiens International Corporation N.V., and Magic Software Enterprises Ltd.— with the number of pledged shares to be determined based on a loan-to-value ratio that will not exceed 60% of the value of the pledged shares.
The Series D Debentures would be issued (if issued) pursuant to (i) Formula’s existing shelf prospectus, dated September 22, 2022, that enables Formula to offer and issue, among other securities, debt securities, as well as (ii) a shelf offering report that would supplement the shelf prospectus and provide details concerning the Series D Debentures.
The Series D Debentures would be subject to the following schedule for repayment of principal, and payment of interest on outstanding principal amounts:
Principal:
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| ● | Principal would be repaid in seven equal annual payments of 12% each, on December 1 of each year from 2027 through 2033; |
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| ● | The final principal repayment (of the remaining 16% of the principal) would be made on December 1, 2034; |
Interest:
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| ● | The initial interest payment will be made on December 1, 2024; and |
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| ● | Additional interest payments on outstanding principal will be made on a semi-annual basis, on June 1 and December 1 of each year from 2025 through 2034. |
Publication of the final-form indenture for the Series D Debentures, as well as the actual offering of the Series D Debentures, are subject to receipt of the required approvals under Israeli law, including the approval of the Company’s board of directors, the ISA and the TASE.
Publication of Rating Reports for Potential New Israeli Debenture Series and Corporate Credit Ratings
Also on August 5, 2024, Formula reported publicly to the TASE and ISA that Standard & Poor’s Maalot (“S&P”) and Midroog (an affiliate of Moody’s) (“Midroog”) had issued credit ratings of ilAA- and Aa3.il for the potential new secured Series D Debenture series, for an aggregate principal amount of up to NIS 150 million (par value) that may be issued and sold. Those credit ratings echo the credit ratings for Formula’s other current series of secured debentures (Series C Debentures) that are traded on the TASE and for Formula as an issuer.