Delshah Capital yesterday joined the wave of Tel Aviv Stock Exchange (TASE) bond issues by US real estate companies. The company notified the TASE that it had raised NIS 400 million in two series, A and B, at 6.8% interest and 4.6% interest, respectively.

Controlled by Michael Shah, Delshah operates in income-producing real estate. The company owns 13 residential properties with 1,100 housing units and commercial properties in New York City. Like many of the US real estate companies whose example Delshah followed, it is incorporated in the Virgin Islands.

Among other things, the money raised by Delshah is earmarked for repaying existing loans, buying minority rights in some of its properties, investing in its existing properties, buying new ones, and regular activity. Before the offering, the Midroog rating agency rated the bonds A3 with a positive outlook for the company, while noting that the rating was positively affected by Delshah's high-quality portfolio of properties, among other things, with an aggregate value of almost $500 million and a 97% occupancy rate.

Midroog noted that a major proportion of Delshah's revenue from its residential properties comes from the US government, a fact that contributes to the stability of its revenue and its business profile. Midroog added, "The company has long-term leases for its commercial properties." On the other hand, Midroog said the rating had been negatively affected by "the company's rapid growth rate, which is likely to affect its ability to rapidly assimilate new properties and generate stable cash flow."

Published by Globes [online], Israel business news - www.globes-online.com - on January 12, 2016

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