The Real Deal New York

“All the rest of my Jewish friends in New York were doing it”: John Catsimatidis to raise money in Tel Aviv

Red Apple Group head plans to offer $100M in bonds backed by Brooklyn properties
By Chava Gourarie | May 11, 2018 01:00PM

John Catsimatidis

If everyone’s doing it, perhaps it’s with good reason? That’s the thinking behind John Catsimatidis upcoming fundraising trip to Tel Aviv.

The billionaire real estate developer, Gristedes owner and former mayoral candidate, is planning to raise around $100 million in bonds on the Israeli bond market. Catsimatidis’ real estate firm, Red Apple Real Estate, will debut in Israel in June with a corporate bond offering backed by several Brooklyn properties.

“All the rest of my Jewish friends in New York were doing it,” Catsimatidis said, “so I said maybe they’re smarter than me.”

The portfolio of properties has yet to be finalized but could include the upcoming Ocean Dreams, a 425-unit mixed-use project in Coney Island. Catsimitadis said he was working to put together a portfolio “that is consistent with the what the Israeli bond issuers like to see.”

Catsimatidis closely followed Larry Silverstein’s recent path to Tel Aviv. Earlier this month, the developer raised $200 million at a 3.5 percent interest rate, the lowest rate for a new foreign company on the Tel Aviv Stock Exchange.

“We don’t need the cash,” Catsimatidis said, but he would like to accelerate the development arm of his business, and “borrowing at four percent” is a smart way to do that.

Over the last year, several new and returning companies have raised bonds in Israel at rates between three and four percent, but that’s not always the case, and rates have been as high as 8 percent.

Red Apple will need to be rated and approved by Israeli regulators in order to be listed on the Tel Aviv Stock Exchange. Discount Bank is advising Catsimatidis on the bond issuance.

As this is his first time on the Israeli market, Catsimatidis will need to introduce Israeli investors and regulators to his business, which is traditionally done through a week-long road show. Catsimatidis said he’d go for three or four days tops, and pointed out that Sunday is a work day in Israel. “It will give me something to do on a Sunday instead of just my radio show,” he said.