Foreign real estate bond comeback on the Tel Aviv Stock Exchange (TASE) - after three months of stagnation, Silverstein Properties has guaranteed a financing round of at least NIS 180 million through an expansion of its existing Series A bonds, led by Leader Underwriters.
Silverstein Properties, owned by Larry Silverstein, deals in income-producing residential and office real estate in New York. Last May, the company raised NIS 633 million in its first bond issue on the TASE. S&P currently gives those bonds an AA rating.
In the part of the issue for investment institutions yesterday, demand totaled NIS 460 million, while the company was seeking to raise only NIS 180 million. Due to the surplus demand, the issue took place at a price of NIS 0.976 per bond, reflecting a 4.1% yield to maturity and a 0.6% premium on yesterday's closing price of NIS 0.9698.
IBI Investment House analyst Nadav Berkovich says that the issue proceeds will be used to acquire income-producing properties and provide loans through a debt fund founded in August. "There is no doubt that according to the market, Silverstein is in a different category from the other US companies. It succeeded in holding an issue with a much narrower spread than other large and strong companies, despite a longer duration and a relatively short period in the capital market," Berkovich wrote in his notice to investors. "We believe that the issue's success will help bonds of other strong companies, which have been reassured that the market is capable of distinguishing between companies, and that some of them are still to raise money in Israel."
Published by Globes, Israel business news - en.globes.co.il - on February 6, 2019
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