As other NYC firms go quiet, Silverstein Properties prepares new Israeli bond offering

First new bond series from NYC real estate firm this year

Sep.September 06, 2019 01:00 PM
Larry Silverstein and the Tel Aviv Stock Exchange Bull (Credit: Getty Images and Wikipedia)

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

After testing the waters of the Tel Aviv Stock Exchange in February with an expansion of its Series A bonds, Silverstein Properties is preparing to make another splash in the market with a new Series B issuance.

Larry Silverstein’s firm has secured a credit rating of ilAA — the second-highest grade — from S&P Maalot for a new bond series worth up to 230 million Israeli shekels (or roughly $65 million), according to a disclosure filed with TASE on Thursday.

The ratings agency noted Silverstein’s “strong competitive position” and “high-quality portfolio” as positives, but added that it considered the geographical and sectoral concentration in Manhattan office properties to be a negative in terms of risk.

On Monday, Silverstein disclosed on TASE that it was “examining the process” of issuing a new bond series, though the date, scope and conditions had yet to be determined. The firm may issue new bonds on the basis of a shelf prospectus it filed last year prior to its $200 million debut, pending approval from the stock exchange and the firm’s board of directors.

A representative for Silverstein declined to comment.

Despite a meltdown of U.S. real estate bonds in Tel Aviv late last year, Silverstein has largely managed to stay above the turmoil. The firm’s Series A bonds were trading at 103.43 cents on the dollar as of Thursday’s close, up 6.5 percent from the start of 2019.

The firm’s Series A expansion in February was massively oversubscribed, with $130 million worth of institutional bids coming in for an offer of $51 million — a sign that Israeli investors continued to have an appetite for at least certain New York real estate bonds.

Silverstein’s Series B would be the first new bond series from a New York-based firm this year. Elsewhere in the U.S., Dallas-based Westdale Asset Management made its TASE debut in May with a $140 million bond offer.

Some other New York firms that raised funds in Tel Aviv have fared much worse. Brookland principal Boaz Gilad has lost control of several condo projects in recent months and started a new career in mortgage lending, after trading in the firm’s bonds was suspended last November.

Meanwhile, Yoel Goldman’s All Year Management has seen its Series B bonds recover from a dismal 45.6 on the dollar in February to a more respectable 89.2 today. All Year was also able to raise another $19.5 million in Tel Aviv in May with a private offering of Series E bonds to undisclosed investors.

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