The Real Deal New York

Abraham Leser raises $32.5M in Israeli bonds

Issuance comes three months after Urbancorp default

July 26, 2016 06:28PM

TelAviv

Tel Aviv Stock Exchange

Abraham Leser’s Leser Group is selling $32.5 million worth of bonds on the Israeli market. The issuance will be the first by a North American company since Canadian developer Urbancorp defaulted on its bonds in April.

Brooklyn developer Leser’s bonds come with a 10-year term and a 6.9 percent coupon, Bloomberg reported.

In 2007, Leser was one of the first to source funding for New York projects. He packaged a portfolio of asset-backed LLCs and float the portfolio on the Tel Aviv bond market as a public offering.

The Israeli bond market offers a cheap source of financing for New York’s real estate firms and U.S. Companies have used it to raise at least $2.8 billion since 2008. Gary Barnett’s Extell Development TRData LogoTINY alone has issued $450 million in Israeli bonds, and in March visited Israel to “restore calm” over Manhattan’s luxury condo market. But in May, Extell’s bonds plummeted in value and one market source described their performance as “distressed.” 

Extell has struggled to land construction financing for its Lower East Side tower One Manhattan Square. Yaniv Saylan, an analyst at Israel Brokerage & Investments, told Bloomberg that Extell needs to finish the tower to pay back bond investors.

According to Saylan, Leser was able to raise funds in Israel because he is well known there. Other New York development firms that have tapped into the Israeli bond market include Pinnacle Group, KBS, Yoel Goldman’s All Year Managament and Michael Shah’s Delshah Capital. [Bloomberg]Konrad Putzier

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