Israel's national water company Mekorot has successfully completed the institutional phase of its public bond offering. It raised about NIS 1.75 billion after investor demand reached roughly NIS 3 billion, three times the initial target amount.

The offering concluded Wednesday evening and expanded Mekorot's existing Series 11 bonds. The company had aimed for around NIS 1 billion in new debt, with the final total still subject to rating agency approval.

This marks Mekorot's first bond issuance of 2026. Proceeds will fund investments in Israel's water infrastructure over the coming year, including connections to remote areas such as the Golan Heights, Jordan Valley, and Arava, along with integration of major new desalination facilities.

The company highlighted that rising water demand from population growth requires sustained investment to maintain a stable and reliable national supply across all sectors.

Prior to the offering, the Energy Ministry conveyed support for Mekorot's ongoing operations to the rating agency and stressed the need to preserve the company's financial strength.

The bonds are inflation-linked with an average duration of approximately 11.4 years. Principal repayments will occur in equal installments, except for the final payment, through 2053.

The bonds hold an il.AAA rating with a stable outlook from S&P Maalot. Strong demand led to a closing price of 1.113 agorot per NIS 1 par value, reflecting an annual inflation-linked yield of about 2.75 percent and a spread of roughly 77 basis points over comparable government bonds.

Chairman Moshe Shimoni stated that the outcome demonstrated investor confidence in the company and its management amid ongoing regional drought conditions.

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. together with underwriters IBI Underwriting and Issuances, Leader Underwriting, and Barak Capital Underwriting.