Eldan Transportation: what really sits between the collateral and the next refinancing test
Eldan is nowhere near an equity-covenant breach, but some of its secured bond series sit very close to their LTV ceilings, so the real buffer sits in unencumbered vehicles and real estate more than in surplus equity. The February 2026 expansion of series Y and 11 proved market access, but it did not detach the refinancing story from the collateral test.
The main article already argued that Eldan's weak point in 2025 was not demand. It was the junction between residual values, funding cost, and the cash appetite of a large fleet. This follow-up isolates the secured funding layer and asks a narrower question: how much really stands between Eldan's collateral stack and the next refinancing test.
The answer is sharper than a quick read of the equity line suggests. On equity, Eldan is far from the wall. On collateral, the picture is much less even: some series still have room, but others sit very close to their LTV ceiling. In the middle sits a contractual structure in which most of the funding includes Cross Default and Cross Acceleration triggers, so a local pressure point does not necessarily stay local.
There is another detail that is easy to miss. The reported LTV is not a conservative liquidation metric. It is a covenant metric. Vehicle value for the test is based on the Levi Yitzhak price list, excluding VAT, with no reduction for the fact that the car was used in leasing and no reduction for mileage. In series V through T, accidents and mechanical condition also do not reduce the covenant value, and in series Y and 11 there is likewise no reduction for mechanical condition or accidents, except for a total loss vehicle that was not put back on the road. The collateral cushion is real, but it is measured on a contract-friendly basis rather than on a hard cash-realization basis.
Equity Is Open, Collateral Is Where It Gets Tight
If the bottleneck is tested through equity covenants, it is hard to find. Equity stood at NIS 874 million at year-end 2025. Against series Y and 11 the minimum is NIS 400 million, against series H and T it is NIS 350 million, against series Z it is NIS 300 million, and against series V it is NIS 225 million. The equity-to-balance-sheet ratios also look wide: 24.5% in series Z through 11 and 22.6% in series V, versus required floors ranging from 9% to 13%.
The same message shows up on the banking side. In the table of covenants for non-bond credit, the actual equity-to-balance-sheet ratio ranges between 22.6% and 24.5%, while the minimum requirements range between 11% and 12%. Put simply, equity gives the company a large buffer before a breach.
| Test | Actual | Tightest threshold | Cushion |
|---|---|---|---|
| Absolute equity against the bond covenants | NIS 874m | NIS 400m | NIS 474m |
| Equity-to-balance ratio in series Z through 11 | 24.5% | 13% | 11.5 percentage points |
| Equity-to-balance ratio in series V | 22.6% | 9% | 13.6 percentage points |
| Equity-to-balance ratio in bank credit | 22.6% to 24.5% | 11% to 12% | 10.6 to 13.5 percentage points |
But that conclusion becomes misleading if it is the end of the analysis. Equity is not what sets the tone in Eldan's funding structure. The real issue is not whether the company is far from an equity breach. It is how close each collateral bucket sits to its contractual ceiling.
Where LTV Really Bites
At group level, the company says vehicle-financing LTV requirements generally range from 70% to 98%, while real-estate financing ranges from 65% to 71.4%. In the secured bonds, the picture is sharper still: series V requires a maximum 92.5% LTV, while series Z through 11 require 98%. In the bonds, a breach can be cured within 14 business days before it becomes an acceleration event.
The important data point is not the ceiling itself, but the distance from it. At December 31, 2025, actual LTV stood at 48.2% in series V, 95.9% in series Z, 96.1% in series H, 93.0% in series T, 96.2% in series Y, and 94.6% in series 11. Near the report date, meaning March 22, 2026, the picture changed, but not evenly: series V stood at 86.1%, series Z at 96.9%, series H at 97.8%, series T at 97.8%, series Y at 91.8%, and series 11 at 93.4%.
That is the core of the follow-up. February 2026 did not create one uniform "everything is now comfortable" picture. It improved room in series Y and 11, but near the report date the tightest points were actually the older series H and T, both at 97.8% against a 98% ceiling. Series Z stood at 96.9%. The buffer still exists, but in part of the structure it is already measured in fractions and low single-digit points, not in large blocks.
There is another subtlety here. For series Y and 11, the LTV calculation deducted about NIS 26.8 million that had not yet been drawn from the trust account. In other words, the reported post-February LTV already benefits from an internal prefunded support layer, not only from asset value or organic debt reduction.
The point is not that the company is on the edge of a breach. That would be an exaggeration. The point is that the group-level cushion is not spread evenly across the entire bond stack. Anyone looking only at the equity ratio is missing the real tension point: Eldan's refinancing story is not an equity story. It is a story of very tight management across several collateral pools at once.
Excess Collateral Is A Cushion, But It Is Also Operating Grease
At December 31, 2025, total liabilities secured by collateral stood at NIS 2.430 billion. That included NIS 65 million of short-term credit, NIS 1.798 billion of bonds, and NIS 567.3 million of long-term loans. At the same date, the company says the realization value of vehicles with no registered lien, together with excess collateral, stood at NIS 670.8 million. Near the report date that figure had fallen to about NIS 610 million.
That sounds like a comfortable buffer, but the company itself explains why it should not be read as free refinancing cash. Excess collateral is used, among other things, to allow fast release of vehicles that are sold, because regulation requires them to be registered to the buyer within six business days from delivery. In plain terms, part of the cushion is not idle reserve. It is working slack that keeps the sales machine moving.
The same logic applies to real estate. Perek Mishor pledged real-estate assets worth NIS 127.2 million to secure obligations of NIS 47.0 million, while still retaining unencumbered real estate with a book value of NIS 369.4 million. That is an important cushion precisely because it sits outside the vehicle stack. But it also needs proportion: NIS 369.4 million is material, yet still small relative to more than NIS 2.4 billion of secured liabilities.
| Flexibility layer near the report date | Amount | What it really provides |
|---|---|---|
| Cash and bank balances | NIS 686m | Immediate liquidity |
| Signed unused bank lines | NIS 160m | Contracted draw capacity, not a substitute for an open market |
| Unencumbered vehicles and excess collateral | About NIS 610m | Potential collateral for new funding, but also operating slack for sold vehicles |
| Unencumbered real estate | About NIS 369m | A second backstop outside the fleet, not a standalone answer to the whole debt structure |
That table matters because it separates four types of "room" that are often blended together. Cash is cash. A signed line is draw capacity. An unencumbered vehicle is collateral potential, not money in the bank. Unencumbered real estate is an additional support layer, but one that still needs a fresh lien and a fresh financing document. They should not be added together as if they were the same unit of liquidity.
February 2026 Opened A Window, But It Did Not Remove The Next Test
On February 9, 2026, the company said it intended to expand series Y and/or 11, and on the same day it received an ilA+ rating for up to NIS 300 million par value of new bonds. According to the rating note, the proceeds were meant for ongoing activity and refinancing of existing financial debt. Four days later, according to the annual report, the company had already completed an actual expansion of NIS 109.894 million par in series Y and NIS 361.605 million par in series 11.
The post-balance-sheet funding table shows how large that window was. Between December 31, 2025 and the report-date cutoff, the company received NIS 471.499 million of long-term non-bank financing and repaid NIS 46.204 million of funding. This is not a footnote. It is the event that prevented Eldan's end-2025 liquidity pressure from becoming an immediate stress test.
But it is important not to confuse time bought with a structural clean-up. February 2026 did not take Eldan out of its secured model. It proved that the market is still willing to fund it inside that model. Even after the move, the collateral picture remained uneven, and the tightest reported LTVs were actually in the older H and T series. The right reading, then, is that the company passed the first market-access test of 2026. It did not eliminate the next one.
This is also where Cross Default matters. As long as the company keeps everything inside the covenant lane, the structure lets it roll fleet, release vehicles, and refinance. But if a local pressure point turns into an unremedied breach, it can create a wider effect than the single facility where the trouble began. That is why Eldan's debt structure should not be judged by the average ratio alone. It should be judged by the narrowest pressure point in the stack.
Bottom Line
What sits between Eldan's collateral and the next refinancing test is meaningful, but it is not lazy surplus. There is wide equity headroom, there is liquidity, there are signed bank lines, there are unencumbered vehicles and real estate, and there is proven market access as of February 2026. That is why this is not an immediate-liquidity scare story.
At the same time, it is not a fully comfortable refinancing story either. Part of the LTV stack already runs high, the measurement is based on a contract-friendly collateral definition rather than on a hard liquidation haircut, part of the excess collateral is needed for day-to-day fleet release, and most of the funding web is linked through broad default mechanics. The key question for 2026 is therefore not whether Eldan can show equity. It is whether it can preserve enough collateral value and enough asset flexibility for the next refinancing round to remain routine rather than stressful.
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