Phoenix Capital Raising: How 2025 Issuance and Post-Balance-Sheet Dividends Move Capital Between Phoenix Insurance, Phoenix Finance and the Issuing Vehicle
The main article showed that the real cushion sits at Phoenix Insurance, not at the issuing vehicle. This follow-up shows that the money raised in 2025 went almost entirely into a subordinated deposit at Phoenix Insurance, while after the balance-sheet date a roughly NIS 420 million distribution package was already approved upward to Phoenix Finance.
What This Follow-up Is Isolating
The main article already established that Phoenix Capital Raising carries almost no standalone cushion and that the real protection for investors sits inside Phoenix Insurance. This follow-up isolates the next question: after 2025 reopened the debt market for the group, where did that capital actually stay, and how much of it was already accessible enough to move one floor up to Phoenix Finance after year end.
The short answer is that the chain really does work in both directions. In 2025 money came down from the market into the issuing vehicle and then almost entirely into a subordinated deposit at Phoenix Insurance. In the first quarter of 2026 the opposite direction was already visible: Phoenix Insurance approved an in-kind dividend of about NIS 147 million and a cash dividend of NIS 273 million to Phoenix Finance, together about NIS 420 million.
That matters because holders are not sitting behind a sealed cash box at the issuer. They are sitting behind a mechanism. That mechanism is strong as long as capital remains inside Phoenix Insurance above its solvency floor, but it is not strong simply because the issuer sold more debt. If excess capital is large enough, part of it can still move upward.
| Stop in the chain | Key figure | Who controls the money | What it means for holders |
|---|---|---|---|
| The issuing vehicle | Year-end cash of NIS 7 thousand | There is almost no independent economic discretion here | This is not a real standalone cushion |
| Phoenix Insurance | NIS 6.92 billion deferred deposit and NIS 44.8 million of interest receivable | This is where the cash and the solvency room sit | This is the real protection layer |
| Phoenix Finance | Post-balance-sheet distribution package of about NIS 420 million | This is where capital becomes accessible again at group level | Excess capital is not fully trapped behind the instruments |
In 2025, the money went almost straight down to Phoenix Insurance
The chain starts with the base agreement. Phoenix Capital Raising does not run a diversified asset book and it does not decide how to invest issuance proceeds. Note 12 states that bond proceeds are deposited in full with Phoenix Insurance through a subordinated deposit under identical repayment and interest terms. The same note also states that Phoenix Insurance bears all of the issuer's expenses, including issuance costs, ongoing operating costs, and directors' insurance.
The cash-flow statement shows just how closed that mechanism is. In 2025 the company recorded NIS 1,870.626 million of net bond issuance. In that exact same amount it recorded an increase in loans and receivables in respect of the deferred deposit at the parent. At the same time, NIS 767.5 million of notes were repaid, and year-end cash remained only NIS 7 thousand. In other words, 2025 did not build a cash box at the issuer. It pushed money down into Phoenix Insurance.
That chart is the core of the story. If the liability side grew, the asset side grew with it almost immediately. The year-end balance sheet tells exactly the same story: out of NIS 6.964 billion of assets, NIS 6.920 billion were a deferred deposit at Phoenix Insurance, NIS 44.823 million was interest receivable from the parent, and only NIS 7 thousand was cash. Note 13 adds that the issuer's finance income, NIS 277.051 million in 2025, came from the parent, and so did expense reimbursement of NIS 1.399 million. This is not a standalone capital pool waiting at the issuer. It is an almost complete claim on Phoenix Insurance.
2025 itself reinforces that reading. In April, series 16 and 17 were issued for aggregate proceeds of about NIS 780 million, in July they were expanded by another roughly NIS 596 million, and in October series 18 added about NIS 494 million more. Together that is about NIS 1.87 billion of gross funding. But anyone reading that figure as though it "stayed" inside Phoenix Capital Raising is missing the point. The money passed through this entity. It did not accumulate there.
Another easy-to-miss detail sits in the issuer's own dividend section. The company says it has never distributed a dividend since incorporation, and it also undertook not to distribute dividends while the relevant deferral conditions exist. So the move upward does not begin at the issuer. It begins one floor above, at Phoenix Insurance.
After year end, the upstream valve already opened
This is where the continuation becomes interesting. On January 29, 2026 Phoenix Insurance approved an in-kind dividend to Phoenix Finance of El Al Frequent Flyer shares valued at about NIS 147 million as of December 31, 2025. On March 25, 2026, alongside approval of the annual results, it also approved a cash dividend of NIS 273 million. According to the March 26 immediate report, the two decisions together amount to a roughly NIS 420 million distribution package for the fourth quarter of 2025.
That is the point that moves the chain analysis from theory to evidence. Capital raised lower in the structure to reinforce regulatory capital did not all remain behind the instruments. Part of the excess was already considered accessible enough to be pushed up to Phoenix Finance.
The immediate report also explains why the board felt comfortable doing it. Phoenix Insurance reviewed its financial position, expected cash flow, capital structure, leverage, and covenant compliance. The board also relied on the September 30, 2025 solvency estimate and on an updated capital-management plan, and concluded that the solvency ratio without transitional measures remained above 100%, above the board's 123% target, and within the 150% to 170% target range during the phase-in period. So the NIS 420 million moving upward was not framed as an exception. It was framed as a use of capital that still sat above a comfortable floor.
This chart is not a one-day balance-sheet bridge. It is a scale check. It shows that the package already moved up to Phoenix Finance was real and meaningful, but it still sat against a much larger excess-capital figure measured as of June 30, 2025 after capital actions. That is exactly why the group could both strengthen its capital layer in 2025 and begin moving part of it upward in early 2026.
The immediate report exposes one more non-obvious detail. Phoenix Finance decided that if the El Al Frequent Flyer shares are sold within the next six months at a price above the valuation used for the distribution, it will inject back into Phoenix Insurance capital equal to the difference. So even when the group moves an asset upward, it does not allow all of the upside to leak away. Value above the NIS 147 million base is explicitly meant to come back down to Phoenix Insurance.
The same report also hints that the upstream valve may not be closed yet. The board says there are additional assets previously approved for in-kind distribution, including the House of Rose rights valued at about NIS 578 million and Phoenix Mortgages, and that if those distributions are executed the no-transition solvency ratio would fall by about 5% but remain above the capital target. That does not mean the distribution will definitely happen. It does mean that, in chain terms, the market needs to watch not only what was raised, but also what may still move upward.
What Really Stays Behind The Instruments
At this point it is important to separate two different kinds of protection. The first is contractual: Phoenix Insurance undertook vis-a-vis the trustee to meet the principal and interest payment terms, and that undertaking cannot be cancelled or changed. That is a very important layer.
The second is economic, and it is less simple. The issuer's deferred deposit is not a senior deposit. Note 12 states explicitly that it ranks pari passu with the subordinated notes and bonds issued or to be issued by Phoenix Insurance and is subordinated to Phoenix Insurance's other liabilities. So even when the money does remain behind the instruments, it remains there inside the insurer's subordinated capital layer, not inside a ring-fenced liquid cash box.
That leads to the key analytical conclusion. Holders should not ask only how much capital was raised in 2025. They should ask how much capital Phoenix Insurance chooses to leave above its 123% floor after testing dividends, in-kind distributions, and rising capital targets. Capital that is truly accessible to the group is the excess that can be sent up to Phoenix Finance. Capital that remains behind the instruments is everything that is not sent up and continues to sit inside Phoenix Insurance's capital layer.
The immediate report on Stella Amar Cohen's departure from Phoenix Insurance's board is not a capital event by itself. It is still a useful reminder of where the real decision center sits. The board whose composition changes is the same board that sets capital targets, tests distributions, and decides how much capital stays behind the instruments and how much moves upward. The issuing vehicle itself has almost no independent discretion.
That is the bottom line: 2025 issuance strengthened the capital chain, but it did not lock all of the value inside the issuer or even inside Phoenix Insurance. March 2026 showed that the upstream valve is open as long as the solvency ratio remains comfortable. So the real protection for holders is not merely the existence of the deposit. It is Phoenix Insurance's discipline in deciding how much excess capital to keep before sending it up to Phoenix Finance.
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