The Real Deal New York

Moinian raises $167M in Tel Aviv bonds at 3% rate

Coupon is lowest ever for US company
By Chava Gourarie | January 18, 2018 06:22PM

Joseph Moinian

The Moinian Group raised $167 million in a bond offer on the Tel Aviv Stock Exchange, according to documents filed with the exchange. The five-year bond carries a 3.05 percent coupon, which is the lowest rate a U.S. issuer has received in Israel to date.

Moinian, led by Joseph Moinian, had upped the offer from $154 million to $175 million, and was oversubscribed to the tune of $475 million in demand at the institutional tender.

This is Moinian’s second bond offer since his entrance into the market in 2015, when he raised $361 million at a 4.45 percent interest rate.

In the last year, Moinian has increased focus on its lending operation, and recently announced over $200 million worth of deals across several projects in New York and South Florida, including a $96 million loan to Delshah Capital which has not yet closed.

In the early days, Israeli bondholders were skittish about Moinian’s lending activities, but appear to have reversed course. “The financing arm, which is relatively new, was a core element in this offering,” said Ori Eisenberg, whose firm Barzell Global advised Moinian on the deal. “It was originally scrutinized by the investors, but they turned from being unfamiliar to recognizing the opportunity.”

Poalim IBI and Leumi Partners were also involved in the deal.

Moinian’s 3.05 percent coupon represents a spread of 230 basis points above Israeli government bonds, while comparable blue-chip real estate companies in Israel maintain a spread ranging between 100 and 150 basis points over government bonds.

The proceeds were not earmarked for a specific purpose, and can be used at the developer’s discretion.

Moinian was not immediately available for comment.