Israel's national water company, Mekorot, has completed the institutional stage of a public bond offering, raising approximately NIS 1.75 billion after receiving investor demand of around NIS 3 billion—three times the amount the company initially sought to raise.
The offering, completed Wednesday night, involved an expansion of Mekorot's existing Series 11 bonds. The company had originally targeted a debt raise of approximately NIS 1 billion. The final amount raised remains subject to approval by the rating agency.
The transaction marks Mekorot's first bond issuance of 2026. As in previous fundraising rounds, the proceeds are intended to finance investments in Israel's water infrastructure over the coming year, including connecting isolated regions such as the Golan Heights, the Jordan Valley, and the Arava, as well as integrating major desalination facilities expected to come online in the coming years.
According to the company, growing water demand and population needs require continued investment in the national water system to ensure a stable and reliable water supply across all sectors.
Ahead of the offering, the Energy Ministry expressed its support for Mekorot and its continued operations to the rating agency, while emphasizing the importance of maintaining the company's financial strength.
Under the terms of the issuance, Mekorot offered inflation-linked bonds with an average duration of approximately 11.4 years. Principal repayments are scheduled in equal installments, except for the final payment, through 2053.
The bonds carry an 'il.AAA' rating with a stable outlook from S&P Maalot. Following strong investor demand, the institutional phase closed at a price of 1.113 agorot per NIS 1 par value, reflecting an annual inflation-linked yield of approximately 2.75% and a spread of about 77 basis points over comparable Israeli government bonds.
Mekorot Chairman Moshe Shimoni said the results reflected investor confidence in the company and its management, particularly during a challenging period marked by ongoing regional drought conditions over the past two years.
"The fundraising will allow Mekorot to continue its critical investment program for developing Israel's water sector, including the expansion of transmission and supply infrastructure and the connection of isolated regions," Shimoni said.
The issuance was led by Discount Capital Ltd., alongside a consortium of underwriters including IBI Underwriting & Issuances, Leader Underwriting, and Barak Capital Underwriting.