Lightstone becomes third NYC developer in a week to plan new Tel Aviv bond issuance, targeting $73M

Lightstone’s first series of Israeli bonds was issued in 2015

New York /
Sep.September 10, 2019 12:00 PM
Lightstone Group Chairman and CEO David Lichtenstein and the Tel Aviv Stock Exchange (Credit: Lightstone and iStock)

Lightstone Group Chairman and CEO David Lichtenstein and the Tel Aviv Stock Exchange (Credit: Lightstone and iStock)

Three examples makes for a trend, right?

A week after Silverstein Properties first broke the ice, David Lichtenstein’s Lightstone Group is now the third New York City developer to disclose plans for a new bond offering on the Tel Aviv Stock Exchange. Rating documents filed with TASE on Tuesday indicates that the firm’s Series B bond issuance may be worth up to 260 million Israeli shekels, or roughly $73 million.

Ratings firm Midroog has given the issuance a credit rating of A1.il, the third-highest category and the same rating as that of Lightstone’s existing Series A bonds.

A representative for Lightstone declined to comment.

Lightstone’s 260 million shekel target surpasses both Silverstein’s 230 million and Spencer Equity’s 240 million, whose value was also disclosed on Tuesday. Of the three bond offerings, only Spencer Equity’s would be secured by a first position on a specific property.

“In general, the market trend is much better for U.S. issuers these days,” said Michel Nevo, head of corporate finance at Tel Aviv-based underwriter Leader Capital Markets, which is working with Silverstein on its new offering.

This is especially true for “tier 1 companies (Silverstein), high rated companies (such as Silverstein and Lightstone) and issuers who are willing to provide a first mortgage and issue senior secured bonds (like Spencer),” Nevo added.

The three companies’ announcements come after a months-long quiet stretch on the Israeli bond markets, as many New York City developers were left reeling after a market collapse in late 2018 and early 2019.

Lightstone’s Series A bonds weathered the turmoil rather well, trading at more than 97.6 cents on the dollar even at the lowest point of the crash, and now going for a remarkable 109.

While Silverstein’s bond-issuing holding company holds a portfolio of eight New York properties plus a recently-added Philadelphia office tower, Lightstone’s bonds are backed by a portfolio spanning from New York to Florida and California, including 18 rental properties in Detroit and three in Mobile, Alabama.

Elsewhere in the country, Dallas-based Westdale Asset Management made its Tel Aviv debut in May with a $140 million raise. Beyond real estate, New York City-based private lender MGG Investment also recently declared its intent to issue a new bond series, though the targeted amount remains unknown.


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