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Silverstein tests Tel Aviv’s shaky bond market with $50M raise

American real estate bonds have been tumbling since November
February 08, 2019 02:30PM

Larry Silverstein and the Tel Aviv Stock Exchange (Credit: Getty Images and Wikipedia)

With American real estate bonds in meltdown in Israel since November, Silverstein Properties has tested the waters at the Tel Aviv Stock Exchange once again.

Larry Silverstein’s firm raised more than $50 million (or 185 Israeli shekels) on Wednesday, Commercial Observer reported.

Silverstein’s expansion of its Series-A bond was massively oversubscribed, with $130 million worth of institutional bids coming in for an offer of $51 million, according to CO. The strong showing could be an indication that investors aren’t painting American companies with a broad brush, and still distinguishing the strong investments from the rest, analysts said.

“It’s a message to the stronger companies that investors see them differently, and if they wanted to raise capital here, they can,” Tel Aviv-based analyst Nadav Berkovich told CO.

Silverstein accepted roughly $50 million in the institutional round at 97.6 cents per bond, or a 4.1 percent yield. In December, bonds from Extell Development, GFI Capital Resources, and Delshah Capital were trading at yields of more than 20 percent, while bonds from Starwood West and All Year Management, whose concerning disclosures helped kick off the market collapse, were selling for less than 60 cents on the dollar. Trading on bonds from Boaz Gilad’s Brookland Capital was stalled entirely.

Silverstein Properties, whose NYC portfolio includes office towers at 7 World Trade Center and 120 Wall Street, first broke into the Israeli debt market last May, tendering a $200 million bond offer and accepting about $175 million in the institutional round. Wednesday’s bond issuance was the first by any U.S. real estate company in Tel Aviv since then. [CO] — Kevin Sun