Clal 2025: what is actually accessible at the holding-company layer after dividends and refinancing

What Is Actually Accessible at the Parent

The main article already made the key point: capital is finally moving upward. Clal Insurance is distributing again, Max has started distributing, and the parent no longer looks like a thin top layer waiting for regulatory relief. This follow-up isolates the sharper question: how much of that value is actually accessible at the holding-company layer once you account for shareholder distributions and the planned Series A refinancing path.

The headline number is comfortable enough. As of December 31, 2025, the parent had NIS 883 million of financial assets, NIS 32 million of current financial liabilities, and NIS 851 million of net financial assets. Long-term financial debt stood at NIS 1.537 billion, so net financial debt declined to NIS 686 million from NIS 892 million at the end of 2024. That is a real improvement, but it still does not answer the cash-access question.

The reason is straightforward. Of the NIS 883 million of financial assets, only NIS 67 million is cash and cash equivalents, and another NIS 241 million sits in other financial investments, mainly money-market funds and short-dated T-bills. The largest line, NIS 575 million, is the fair value of Series 15 issued by Clal Insurance Capital Raising and held at the parent. That matters. It is an economic asset, but it is not contractual near-term cash. Its principal matures only on October 31, 2075, and the first date on which Clal Insurance Capital Raising may redeem it early is October 31, 2036. So if the parent wants to use it for near-term debt management, it has to monetize the security in the market rather than wait for scheduled repayment.

That is why the more relevant number for immediate accessibility is not NIS 851 million but NIS 276 million. That is NIS 67 million of cash plus NIS 241 million of short financial investments, minus NIS 32 million of current financial liabilities. It is not trivial, but it is also not the same thing as the headline net-financial-assets figure.

There is also an accounting layer worth highlighting. In October 2025, Clal Insurance Capital Raising privately issued NIS 555 million par value of Series 15 to the parent in exchange for canceling a NIS 450 million capital note that had previously been recognized as additional Tier 1 capital at Clal Insurance. The transaction created a gain of about NIS 24 million at the parent and an equal loss at Clal Insurance. In other words, part of the improvement at the holdco layer came from reshaping the asset, not only from building cash. That is not mere window dressing, but it does reinforce the gap between economic value and immediately spendable cash.

The Post-Balance-Sheet Sources-and-Uses Bridge

Stopping at December 31 misses what happened immediately afterward. After the balance-sheet date, three approvals define the holdco layer far better than any consolidated headline:

• Clal Insurance approved a NIS 600 million dividend in March 2026.
• Max approved a NIS 56 million dividend in March 2026.
• The parent approved a NIS 400 million dividend to its own shareholders in March 2026.

The simple bridge is therefore this: take the NIS 276 million of net liquid resources at year-end, add NIS 656 million approved to move up from below, and subtract NIS 400 million approved to move down to shareholders. That leaves roughly NIS 532 million before any further Series A reduction.

That is exactly where the phrase "cash is moving up" stops being precise enough. It is moving up, but not in an amount that lets the parent both pay a generous shareholder dividend and fully retire Series A without another step.

That NIS 555 million figure is not a rough estimate. In the March 26, 2026 filing, the company itself showed that a full early redemption of Series A would require NIS 555.041 million on NIS 549.1 million of par value outstanding, including accrued interest and the early-redemption premium. So even before adding other financing costs, running interest, or any additional uses, the bridge remains slightly negative.

That does not mean the company is stuck. It has an unused NIS 250 million credit line, and it also has the theoretical option to monetize the Series 15 instrument held at the parent. But it does mean the company itself framed the next Series A step as it really is: not a transaction funded by burning down the holdco buffer, but one explicitly conditioned on issuing Series D.

Why Series D Is About Flexibility, Not Distress

If you read only the Series D announcement, it is easy to default to a debt-pressure story. That misses the structure. Back in July 2025, the company already expanded Series C by NIS 350 million par value, received proceeds of about NIS 358.4 million, and used them to redeem NIS 350 million par value of Series A early. In other words, the previous step was also financed through orderly refinancing rather than through surplus holdco cash.

The March 2026 step follows the same logic. The company is evaluating a new Series D, whose net proceeds are intended for a partial or full early redemption of Series A, and the redemption itself is conditioned on completing that issuance. The filing states explicitly that there is no certainty around the issuance, its scope, or therefore whether the redemption will be full or partial. Management is not presenting a full takeout of Series A as a fait accompli. It is presenting it as a transaction that needs dedicated funding.

That is also why it is important to separate a liquidity read from a credit read. On the credit side, there is no sign here of immediate strain:

• Shareholders' equity stands at about NIS 10.8 billion.
• Net financial debt to assets as of December 31, 2025 is about 6%.
• Following the accounting transition, the minimum equity thresholds under the bond deeds were adjusted to NIS 2.96 billion for Series A and B and NIS 3.15 billion for Series C.
• The company says it is in compliance with all financial covenants and that no event of immediate repayment has occurred.

So Series D does not read like a rescue rope. It reads like a decision to keep the parent flexible after paying shareholders and after reducing Series A. This is not a covenant story. It is a flexibility story.

There is also a useful market signal here. In January 2026, before the actual expansion of Series 15 was completed, the institutional tender received early orders of about NIS 1.0 billion, of which commitments totaling NIS 622.5 million were accepted. A few days later the actual expansion was completed with proceeds of roughly NIS 622 million. That does not mean every financing window is permanently open, but it does show that the market was willing to fund the insurance-capital layer. So the chokepoint at the parent is not basic market access. It is the price at which management is willing to swap old debt for new debt while preserving the holdco buffer.

What Still Is Not Free Cash

This is the key distinction between value created and value accessible. Even when cash is moving up from insurance and Max, not every shekel reaching the parent becomes free cash for shareholders.

First, dividends from below still pass through regulatory gates. At Clal Insurance, the dividend policy is tied to maintaining the board's minimum solvency target of 115%, without transitional measures. Management's presentation showed an estimated 163% as of September 30, 2025 during the transition period, but the actual December 31, 2025 solvency ratio was not yet published in the annual report and is expected only with the first-quarter 2026 results. At Max, dividend distributions remain subject to the Supervisor of Banks and to capital-adequacy requirements.

Second, the parent itself has structural commitments that narrow the meaning of "free cash". The company committed to the Capital Markets Authority that it would replenish Clal Insurance's equity up to the MCR level if needed, and it may do so through capital actions that dilute the parent. To support that commitment, it also undertook to keep its own equity at no less than 50% of assets on a solo basis. In addition, under the Max control permit it committed either to inject capital into Max or not to block a capital raise if capital support is required.

That is why the real question is not whether there is value in the group. The real question is how that value reaches the parent. Dividend, asset sale, sale of Series 15, use of the bank line, or refinancing Series A through Series D are five very different channels in terms of cash quality.

Bottom Line

The main article was right to say that cash is starting to move upward. This follow-up shows that the sentence is true, but still not precise enough. The holdco layer now has more value and more flexibility, but not enough immediate cash to pay a generous shareholder dividend and fully retire Series A at the same time without relying on refinancing or asset monetization.

What matters is that the bottleneck has changed. The older debate around Clal was whether value could move up from the insurance layer at all. The debate now has shifted to a different question: will management prefer to preserve a holdco buffer and refinance Series A, or will it be willing to consume more cash and monetizable assets to accelerate debt reduction. That is already a capital-allocation debate, not a debate about basic access.

For the near-term market reading, four checkpoints matter most: the scope of Series D if it is issued, whether the Series A redemption is full or partial, the ratio between the NIS 656 million approved to move up from subsidiaries and the NIS 400 million approved to move down to shareholders, and the updated Clal Insurance solvency ratio as of December 31, 2025. That is where it will become clear whether the holdco layer has truly moved into a more flexible funding position, or simply into a more comfortable position on paper.