Foreign company Copperline Americas' TASE bond issue is coming back to life. The company will next week attempt to complete a NIS 400 million ($103 million) bond issue on the Tel Aviv Stock Exchange (TASE), its first, after yesterday reporting a reduction in the average duration of the series to be issued from 4.7 years to only 3.3 years. The significance for investors is that Copperline will begin repaying the bond principal in April 2017, 18 months after the issue, and will complete redemption of the bonds in April 2020.
Copperline, owned by the Schlesinger family, held a tender for institutions last month as part of an issue, but demand totaled only NIS 310 million. Combined with the uncertainty prevailing in the capital market at the time, the remainder of the sought-for amount could not be raised in the public tender, and the company halted the process. It is now renewing it, and expects greater demand from the investment institutions, following the shortening of the average duration, even though the maximum interest rate in the issue has been cut from 6.5% to 6.3%.
Copperline owns 139 buildings with almost 3,000 rental apartments in the states of New York, Connecticut, and Florida, as well as 250 hotel rooms. These properties generate $14 million in funds from operations (FFO) annually. Copperline has no development business; it plans to invest $85 million, most of the projected proceeds from the bond issue, in acquiring the shares of its partners in some of the properties, repaying existing loans on properties, and renovating buildings for the purpose of adding 317 rental apartments and 60 stores to its portfolio.
The company was brought to make an offering in Israel by Yehonatan Cohen, a consultant who was until recently CEO of Clal Finance Underwriting.
Published by Globes [online], Israel business news - www.globes-online.com - on October 7, 2015
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