Graphic Strtip - Convertible Securities
Convertible Securities

Convertible securities such as warrants and convertible bonds can be issued on the TASE.
Listing of convertible securities is advantageous to both the company and the investor:

  • The company receives partial renumeration immediately and can complete the financing round at a later stage.
  • The investor enjoys a lower risk of a decrease in share prices.
According to the TASE Rules and Regulations, the allocation of convertible securities listed for trading is subject to the approval of the TASE for the listing of the registered securities and the securities resulting from the conversion. The allocation of convertible securities not listed for trading is subject to receipt of the TASE's approval for the listing of the securities arising from the conversion.

Under the terms of convertible securities listed for trading, it is determined that they are convertible at any time, with some exceptions. In addition, it is possible to determine that it will not be possible to convert convertible securities in a given period, in accordance with the directives.

 Rules for Listing Share Warrants

  • The exercise period of warrants cannot exceed four years. 
  • There is no minimum requirement for the value of public holdings.
  • A limit on the number of warrants series that can be issued applies to small companies, with a low value of public holdings, as follows: 
     
    Alternative
    Value of public holdings
    in each type of shares
    Maximum total number of series registered for trading after listing
    A
    Less than NIS 8 million
    1
    B
    Over NIS 8 million, up to NIS 24 million
    3
    C
    Over NIS 24 million
    Unlimited
  • A registered warrant is convertible into one share only.
  • Series of registered warrants issued only to employees are not counted in this regard.

Rules for Listing Convertible Bonds

  • The TASE rules lay down a NIS 24 million minimum required value of public holdings in convertible bonds.
    • If the conversion rate is not more than 7% per year of the price of the underlying shares – the bonds are on the “equity track” and the minimum required value of public holdings is NIS 12 million. 
    • If the conversion rate is more than 7% per year of the price of the underlying shares, the company must also comply with the shareholders’ equity requirement applicable to companies issuing ordinary bonds.
  • The terms of the convertible bonds may specify conditions under which the company is entitled to force their redemption.