Rani Zim 2025: The Covenant Map, the Refinancing Bridge, and the EBITDA-to-Interest Dispute
Rani Zim's 2025 move did not erase financing risk. It replaced about NIS 558 million of bank debt with bonds, pushed a large part of the maturity wall into 2030 and 2031, but still left 2026 dependent on rollovers, monetizations, and a real dispute over the Series C EBITDA-to-interest ratio.
The main article already established that Rani Zim's operating base is holding up, but that the real test moved into 2026. This follow-up isolates only the financing layer: what actually changed when the company swapped bank debt for bonds, how much of the 2026 funding bridge is already signed versus still assumption-based, and why the Series C EBITDA-to-interest dispute is not a footnote.
Three points drive the read. First: 2025 did not truly reduce debt, it changed where debt sits. Total bank debt fell from about NIS 1.034 billion to NIS 476 million, but bonds rose from NIS 827 million to NIS 1.555 billion. Second: the 2026 source map the company presents totals NIS 355 million, but only NIS 192 million of that comes from opening cash, signed unused facilities, and refinancings already completed. Third: the covenant map looks calm only as long as one accepts the company's calculations. In Series C, the same EBITDA-to-interest ratio stands at 2.33 under the company's view and 0.91 under the Securities Authority view. That is already the difference between clearing the threshold and falling below it.
2025 Did Not Remove Debt. It Rewired The Funding Layer
The 2025 financing move was real. It just was not a deleveraging story. It was a story of replacing shorter bank funding with longer tradable debt. The numbers show it clearly: short-term bank obligations fell from NIS 739 million to NIS 263 million, long-term bank debt fell from NIS 295 million to NIS 213 million, and the stock of outstanding bonds jumped from NIS 827 million to NIS 1.555 billion. Across those three buckets together, the balance moved from NIS 1.861 billion at the end of 2024 to NIS 2.031 billion at the end of 2025. Immediate pressure fell, but the debt layer itself did not disappear.
That is also why the financing move should be read as buying time, not as solving the problem. In the presentation, the company frames 2025 as a year of refinancing and re-financing moves totaling about NIS 850 million, which it says should improve annual cash flow by about NIS 58 million, including about NIS 24 million of interest savings and NIS 34 million of principal-payment relief. That is real payment-profile relief, and it matters. But it is still relief in timing, not proof that the company no longer needs refinancing.
Breaking down the bond stack makes the time bought in 2025 easier to see:
| Series | Carrying value at 31.12.2025 | Principal profile |
|---|---|---|
| Series B | NIS 363.2 million | Quarterly amortization through March 2028 |
| Series C | NIS 461.3 million | Amortizing through July 2029, including a 50% final payment |
| Series D | NIS 496.1 million | 10% in June 2030 and 90% in June 2031 |
| Series E | NIS 230.4 million | 20% in June 2030 and 80% in June 2031 |
That table is the structural shift. Series D and E pushed a large part of the maturity wall into 2030 and 2031, which is why the end of 2025 looks better than the end of 2024. But it looks better mainly because maturities were extended and the funding address changed, not because the company already generated excess cash that lets it step away from leverage.
The 2025 cash picture says the same thing. Operating cash flow was positive at NIS 42 million, but investing cash flow consumed NIS 229 million, financing cash flow was only NIS 160 million, and year-end cash fell to NIS 11 million. Net liquid assets also stood at only about NIS 12 million. This is not a company that closed the financing question. It is a company that bought itself a longer runway to answer it.
The 2026 Bridge Exists, But Only Part Of It Is Already Locked In
To understand why 2026 is still open, the starting point is working capital. At the end of 2025 the company had a working-capital deficit of about NIS 78 million, which it explains mainly by saying that about NIS 255 million of short-term loans financed assets under construction, land inventory, and investment property classified as long-term. After the balance-sheet date, about NIS 40 million was already refinanced and moved into long-term debt, and the company says it is still working to refinance another roughly NIS 124 million, its share, into longer maturities once the relevant project is completed. In other words, 2026 is still a completion-and-rollover year, not a free-cash year.
The presentation gives that story a more concrete shape. The company presents NIS 355 million of 2026 funding sources, split as follows:
If that slide is broken down by execution quality, the picture becomes sharper. About NIS 192 million comes from opening cash, signed unused facilities, and refinancings already completed in the first quarter of 2026. The remaining NIS 163 million already depends on what still has to happen: expected refinancing, monetization of the Kfar Saba logistics units, and realization of the energy activity.
| Source in the 2026 map | Amount | What matters |
|---|---|---|
| Opening cash | NIS 11 million | A very small opening cushion |
| Signed unused facilities | NIS 171 million | The hardest source in the whole map |
| Refinancings already completed | NIS 10 million | Already done, but still small |
| Expected refinancings in H1 2026 | NIS 78 million | Based on assumed financing of 75% for leased areas and 60% for unleased areas and the data-center real estate |
| Net realization of Kfar Saba logistics units | NIS 56 million | Calculated on a 100% basis, while the company's share is 50% |
| Energy realization and deposit release | NIS 29 million | Based on the terms agreed with the buyer and includes release of a pledged deposit of about NIS 5.2 million |
This is the heart of the issue. The first half of 2026 still looks mainly like a story of facilities and rollovers. The second half already looks more like a story of asset realizations. That is not automatically a problem, but it is a picture in which the margin of safety depends not only on banks and the bond market, but also on turning projects and assets into actual cash.
Even the board's reassuring liquidity statement needs to be read in that light. The company states that it does not have a liquidity problem, but that conclusion explicitly relies on liquid balances near the report date, on unused credit facilities, and on the ability to continue raising credit from the banking system, institutional money, and the capital market. In other words, even in the company's own reassuring wording, 2026 comfort still rests on ongoing funding access, not on cash already sitting on the balance sheet.
The Covenant Map: Series B Looks Comfortable, Series C Is The Real Debate
Not all of Rani Zim's covenants tell the same story. In Series B, the picture looks fairly calm: equity stands at NIS 1.010 billion versus a floor of NIS 260 million for acceleration purposes and NIS 300 million for coupon step-up purposes, the NOI-based coverage ratio stands at 1.73 versus a 1.10 floor, net financial debt to net CAP stands at 60% versus a 75% ceiling, and equity plus deferred taxes to the balance sheet stands at 35% versus an 18% minimum. This is not the debt layer that explains the tension.
Series C is different. Here too, the equity and leverage tests still look compliant: NIS 1.010 billion of equity against a NIS 320 million minimum, a 30% equity-to-balance-sheet ratio against a 20% minimum, and 60% net financial debt to net CAP against a 75% ceiling. But then comes the EBITDA-to-interest test.
| Test | Contractual threshold | Position at 31.12.2025 | The right reading |
|---|---|---|---|
| Series B NOI-based coverage | Minimum 1.10 for acceleration, 1.15 for coupon step-up | 1.73 | Clears with a reasonable margin |
| Series B net financial debt to net CAP | Maximum 75%, and 70% for coupon step-up | 60% | Relatively comfortable |
| Series C minimum equity | Minimum NIS 320 million, and NIS 340 million for coupon step-up | NIS 1.010 billion | Not the bottleneck |
| Series C EBITDA to interest | Minimum 1.1 for acceleration, 1.2 for coupon step-up | 2.33 under the company's view, 0.91 under the Securities Authority view | This is the material dispute |
| Series C net financial debt to net CAP | Maximum 75% | 60% | Compliant |
This is exactly where the small footnote at the bottom of the table matters. The annual report does not present a consensus. It presents two readings of the same covenant. Under the company's view, the ratio clears. Under the Securities Authority view, it falls below 1.1. That is no longer a question of a few basis points of pricing. It is the difference between a covenant that passes and a covenant that sits below the acceleration threshold.
That is why Series C is the real monitoring point in the covenant map, even when the overall table looks calm. Series B tells a story of decent covenant room. Series C tells a different story: most metrics look fine, but one of the key ones depends on how EBITDA is defined and how interest cost is measured. Once that happens, the covenant stops being a footnote and becomes a question about the credibility of the whole financing read.
Bottom Line
Rani Zim's 2025 financing move bought real time. It sharply reduced near-term bank pressure, pushed a large part of the maturity wall into 2030 and 2031, and created a more workable window for assets that still have not reached mature NOI. But it did not close the discussion. It simply moved it to a different question: can 2026 convert that extra time into longer funding, asset realizations, and accessible cash.
That is why the 2026 picture has to be read in two colors. On one side, there are already signed facilities, completed refinancing, and a part of the post-balance-sheet debt that has already moved into longer maturities. On the other side, a meaningful part of the picture still depends on future refinancings, monetizations, and financing assumptions that still need to materialize. And above all of that sits the Series C footnote, where the company reports covenant compliance under its own calculation while the same annual report reminds the reader that the Securities Authority view points to a materially different ratio.
The bottom line is simple: Rani Zim did not eliminate its financing issue, but it did change its shape. In 2025 the question is less "is there an immediate maturity wall" and more "can 2026 really turn short credit, planned refinancing, and on-paper monetizations into a cleaner long-term funding structure." That is where it will become clear whether the 2025 refinancing cycle was a solution, or only a successful deferral.
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