Foreign real estate company Starwood West, which operates seven shopping malls in the US, will conduct the auction tomorrow for its first bond issue on the Tel Aviv Stock Exchange (TASE), after strong demand in the auction for investment institutions. Despite the high demand, the company will have to forego NIS 200 million of the amount it had decided to raise, following a decision by the S&P Maalot rating agency.
Starwood West, part of the global Starwood group, offered bonds to participants in the auction for institutions with a relatively high 6.4% interest rate, after obtaining an A preliminary rating from S&P Maalot for a bond issue of up to NIS 850 million. As a result of the high interest rate, demand for the issue totaled NIS 1.23 billion in the auction for institutions, from which Starwood West decided to take orders for NIS 997 million at 5.95% annual interest. Following the success in the auction, which reflects a NIS 1.1 billion amount for the entire issue, Starwood West contacted S&P Maalot and said it wanted to raise more than NIS 910 million. S&P Maalot limited the issue for institutions to NIS 814 million. On the other hand, the result was that the interest rate for the auction dropped to 5.7%.
The global Starwood group, controlled by Barry Sternlicht, is one of the largest real estate and hotel companies in the US. In order to raise debt on the TASE, Starwood established a subsidiary in the Virgin Islands named Starwood West, which will receive seven of the group's shopping malls and issue bonds for them without collateral.
Published by Globes [online], Israel Business News - www.globes-online.com - on March 5, 2018
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