PADICO HOLDING Announces the Issuance of the First Corporate Bonds in Palestine at a par Value of $70 Million

By Padico Holding, PRNE
Tuesday, May 10, 2011

RAMALLAH, Palestine, May 11, 2011 - PADICO HOLDING, a leading investment company operating in the
Palestinian territories, announced today that it has successfully issued the
first corporate bonds in Palestine, at a total par value of USD 70 million.
The Palestinian financial services sector has not previously witnessed the
issuance of any form of bonds or other long term financing tools specialized
in project financing outside the existing customary bank loans.

The bonds are set to be privately placed and will not be
listed nor traded on the Palestine Exchange (PEX). Several banks and
financial institutions have expressed notable interest and commitment to
purchase PADICO HOLDING's bonds, which led to an oversubscription. Such
interest reflects high confidence in the company's repayment abilities and
the long term sustainability of its investment portfolio, especially given
its strong track record in mitigating local political risk. As a long term
financing tool, the bonds represent a highly suitable financing option for
PADICO HOLDING's investment strategy which targets medium and long term
strategic projects. The bond issuance will grant the company adequate levels
of liquidity for funding its new projects that require sometime to become
income generating.

PADICO HOLDING will issue 7,000 bonds of senior debt secured
by specific assets with a total value of USD 70 million. Par value per bond
equals USD 10,000, and minimum subscription amounts to 10 Bonds with a total
amount of USD 100,000. The bonds' maturity is 5 years following the issue
date, with an annual fixed interest rate of 5% for the first 30 months (2.5
years), and a variable annual interest for the subsequent 30 months (2.5yars)
equal to 6 months US LIBOR + 2.5%, with a floor of 5 % and ceiling of 6.50%.

Dr. Salam Fayyad, the Palestinian Prime Minister, confirmed
the significance of this bond issuance stating: "We believe that the issuance
of corporate bonds by the private sector is a true milestone for Palestine's
financial services sector. We are also proud that PADICO HOLDING and the
private sector have preceded the public sector in issuing the first
Palestinian bonds, which represents a sign of agility and progressiveness."

Munib R. Masri, PADICO HOLDING's Chairman stated that "This
bond issuance represents PADICO HOLDING's long term vision and commitment to
investing in Palestine, and reaffirms our confidence in the local economy. We
have conducted business in Palestine despite the political risk involved, and
we have maintained an impressive track record of financial performance."

"This Bond issuance greatly supports PADICO HOLDING's
strategic plans and future directions. Diversifying our financing schemes,
and matching our investments with the incoming cash flows will enable us to
fund long term and strategic projects while reducing dependency on short term
bank loans. This new financing scheme will also allow us to adopt a
consistent dividend policy," said Samir Hulileh, PADICO HOLDING's CEO.

PADICO HOLDING plans to establish several mega projects in the
coming period, such as a power generation project in northern West Bank at a
total cost of USD 300 Million, and a large scale tourism and real estate
development project in Jericho.


    Nur Nasser Eddin
    Head of Investor Relations
    Tel: +970-2-2403336


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