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The Palestinian holding company, Palestine Development and Investment Company (PADICO), Tuesday announced issuance of the first corporate bonds in Palestine worth $70 million directed at the private sector. Prime Minister Salam Fayyad, who attended the event PADICO held in Ramallah to announce its most recent project, welcomed the move and said that issuing bonds encourages investment. He said that the private sector was able to issue the bonds before the government, even though the government also has a plan to issue bonds. Fayyad stressed that the PA will not stop meeting its financial obligations whether it was paying salaries or other obligations in spite of the crisis caused when Israel froze transfer of tax revenues to the PA. PADICO issued 7,000 bonds; each will be at par value of $10,000 with a minimum subscription of 10 bonds. Several banks and financial institutions have expressed interest and commitment to purchase PADICO bonds upon their issuance, said PADICO officials. Introducing the bonds, PADICO chief executive officer Samir Huleileh said that issuing the bonds was part of PADICO’s plans to diversify its investments. “By diversifying our financing schemes and matching between our long term investments and cash supplies,” he said, “we will be able to be more prudent and remain able to finance long term and strategic investments while reducing dependency on short term banking credit.” Issuing the bonds also maintains “a steady stream of dividend payments because of this new financing scheme,” he said. Maher Masri, chairman of the Palestine Capital Market Authority, said the bonds will diversify the financing options available to the private sector. “We are hopeful that other competent and solid companies in Palestine will follow suite and issue financial instruments that will augment the variety of financial intermediation tools in Palestine in addition to improving our credit standing as a financial market,” he said. PADICO chairman of the board, Munib Masri, said the issuance “is a vote of confidence in the local economy and in PADICO’s long term commitment and vision in Palestine.” He expressed hope that the bonds will raise more money for PADICO to finance additional long-term investments. “That is our vision, and that is our strategy for Palestine,” he said. The bond’s maturity will be five years after the issue date with an annual fixed interest rate of 5% for the first 30 months of issue and a variable annual interest for the subsequent 30 months. PADICO, a limited public shareholding company established in 1993, is the leading investment holding company in the Palestinian territories with a paid capital of $250 million.