Israel to launch index of North American real estate companies

Beginning in July, a new index comprised of bonds issued by North American real estate companies will trade on the Tel Aviv Stock Exchange.

The exchange’s board of directors approved the measure earlier this week.

The Tel Bond Global index will include 25 bond series issued by 18 companies and totaling 14.5 billion shekel, or $4.1 billion. While the index won’t be limited to real estate companies or North American ones, at present all 18 issuers fit that category. The largest of the group is Joel Wiener’s Pinnacle Group [TRDataCustom], weighing in at 11.1 percent of the index, across three bond series.

The remaining companies include New York heavyweights like Extell Development, Related Companies and Jeff Sutton’s Wharton Properties.

The index will trade at yields above the general corporate bond market in Israel, paying 4.7 percent on an average term of 3.6 years, as of this week. The relatively high yield reflects the spread between coupon rates for foreign and Israeli companies. That spread has been narrowing, and American companies have consistently issued bonds at under 4 percent rates in the past several months, but isn’t expected to close entirely.

The index will begin trading on July 16. [TheMarker] — Chava Gourarie