Israel : Potential Issuance of Company's Debentures

This is an English convenience translation of the original Hebrew version. In case of any discrepancy, the binding version is the Hebrew original

Israel Corporation Ltd.

Registrar Number: 520028010

Form 121 Public

To:

The Securities Authority

To:

The Tel Aviv Stock Exchange

Date of Transmission: 01/01/2017 Reference: 2017-01-000033

www.isa.gov.il www.tase.co.il

Immediate Report

The Event: Potential Issuance of Company's Debentures

See Immediate Report attached.

The date when the event first became known to the corporation: 01/01/2017 Time: 08:00

Name of report authorized signatory and name of authorized electronic signatory: Maya Alcheh Kaplan Position: Vice President, General Counsel and Company's Secretary

Signature date: 1/1/2017

Form structure updated: 29/12/2016

Securities of the corporation are listed in the Tel Aviv Stock Exchange Short name: Israel Corporation

Address: P.O.B. 20456, Tel Aviv 61204 Tel: [phone], Fax: [phone] Email: [e-mail]

Name of Electronic Reporter: Maya Alcheh Kaplan. Position: Vice President, General Counsel and Company's Secretary. Address: Aranha 23, Millennium Tower, Tel Aviv 61204. Phone - 03- 6844517, Fax: [phone], e-mail: [e-mail]

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This is an English convenience translation of the original Hebrew version. In case of any discrepancy, the binding version is the Hebrew original

Israel Corp. Ltd

Israel Corp. Ltd Millennium Tower 23 Aranha Street P.O. Box 20456 Tel Aviv 61204 Israel

Tel.: [phone] Fax: [phone]

Attorney Maya Alcheh-Kaplan Vice President, General Counsel and Company's Secretary

To To

January 1, 2017

The Securities Authority Tel-Aviv Stock Exchange

via MAGNA via MAGNA

To whom it may concern,

Immediate Report: Potential Issuance of Company's Debentures

Israel Corporation Ltd. (hereinafter: the "Company") respectfully reports, that the Company's management is considering the possibility of a public offer of Debentures (Series 10 and 11) of the Company (hereinafter: the "Debentures"), by way of expansion of each of the said series, pursuant to a Shelf Offer Report by virtue of the Shelf Prospectus of the Company dated May 5, 2016.

As of the date hereof, the terms and structure of such issuance of Debentures, to the extent executed, were not determined, and the issuance of the Debentures and the publication of a Shelf Offer Report as mentioned, are subject, inter alia, to the receipt of the confirmation of the rating agency for the rating of the Debentures, to the resolution of the Company's Board of Directors regarding the terms and structure of the issuance of the Debentures and to the receipt of an approval from the Tel Aviv Stock Exchange Ltd. for listing the Debentures for trading.

It shall be emphasized, that the scope, the terms and the date of the said action are yet to be determined, and as of the date of this report there is no certainty of its execution.

Sincerely,

Israel Corporation Ltd.

Name of report authorized signatory and name of authorized electronic signatory: Maya Alcheh Kaplan Position: Vice President, General Counsel and Company's Secretary.

Signature date: 1/1/2017