The Cross Israel Highway transaction is the largest and only the second project finance transaction completed in Israel. The deal, structured on a build, operate and transfer model (BOT), was closed in October of 1999 with 90% commercial debt and 10% equity. The central section of the road was completed in fewer than five years, opening in May 2004.
The commercial debt was provided through a New Israeli Shekel (NIS) syndicated loan facility with a NIS equivalent of US $850 million arranged by Bank Hapoalim and a note purchase facility for US $250 million arranged by the Tyco Group. The NIS syndicated loan consists of two tranches and included a 6.5-year interest roll up based on a term of 28 years, with 29% of the facility repaid after 20-21 years. The facility was syndicated to domestic banks and an Israeli pension fund. The note purchase facility necessitated a rating of BBB by Standard & Poor's. Prior to financial close, the fixed rate pricing of the facility had to be adjusted due to adverse conditions in the emerging markets. The term of the facility is 28 years.