The Real Deal New York

Jeff Sutton to attempt a comeback on the Tel Aviv Stock Exchange

Wharton Properties to raise up to $200M in Israeli bonds

November 01, 2016 07:30AM
By Chava Gourarie

Jeff Sutton

Jeff Sutton

After his failed attempt to raise up to $500 million on the Tel Aviv Stock Exchange last year, Jeff Sutton is back for another attempt at issuing bonds in the Israeli market. His firm Wharton Properties submitted a shelf prospectus last month for a bond offering of up to $200 million.

This time, Sutton plans to issue a more straightforward offering with less perceived risk to bondholders. Unlike last time, the money raised is expected to go toward acquisitions and development rather than the repayment of mezzanine loans, sources said.The issuance is set to occur early next year.

In addition, the mix of company assets that will be included in the Wharton TRData LogoTINY entity issuing the bonds is expected to be more attractive to bondholders. The entity will include 17 properties in Manhattan and Brooklyn worth about $800 million, including 747 Madison Avenue, home to Givenchy, and 29 West 34th Street, home to Geox and Aldo.

Wharton is seeking a rating from the Israeli rating agency S&P. Last year, they were weighted AA, higher than other American companies who succeeded on the Israeli market.

The Israeli news website TheMarker first reported Sutton’s plans to issue the bonds. The biggest criticism against Sutton’s last attempt was its complexity, TheMarker wrote. “Sutton’s new plan is based on the lessons he and his advisors learned from the first issue.”

Sutton is being advised by the financial consultants Rafael Lipa and Gal Amit.

Several other American companies are also issuing bonds on the Israeli market for the first time, including Namdar Realty Group, after a drought over the summer. Joel Wiener’s Pinnacle Group, which trades under the name the Zarasai Group in Israel, is seeking to raise up to $80 million in its third bond issuance.

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