Institutional investors swarm Silverstein’s new TASE bonds

American-issued real estate bonds had collapsed on the TASE early this year

New York /
Sep.September 17, 2019 02:24 PM
Larry Silverstein and the Tel Aviv Stock Exchange (Credit: Getty Images)

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

UPDATED, September 18, 9:45 a.m.: Israeli investors are once again jumping at the opportunity to buy bonds backed by New York City real estate.

Silverstein Properties, which disclosed earlier this month that it would be issuing up to 230 million Israeli shekels (or roughly $65 million) worth of new bonds on the Tel Aviv Stock Exchange, received nearly triple that amount in bids from institutional investors at an auction on Monday, according to an announcement filed with the exchange on Tuesday.

The new series of bonds will have a longer duration of 6.5 years. The institutional bids totalled $651 million shekels (or $183 million) and resulted in a closing interest rate of 3.49 percent, which is the maximum rate the bonds may carry once they are issued to the public. The issuance of Silverstein’s Series B bonds is still pending approval from the relevant authorities.

“We are happy with the results of the issuance and the fact that almost all the institutional investors participated in the offering,” said Dara McQuillan, a spokesman for Silverstein Properties. “This is another step in strengthening the relationship of our company with the Israeli market.”

The developer’s existing Series A bonds carry an interest rate of 3.38 percent. An expansion of that bond series in February was also heavily oversubscribed, with $130 million worth of institutional bids coming in for an offer of $51 million.

Silverstein was the first of three New York developers to announce plans for new bond issuances this month, with Joel Gluck’s Spencer Equity and David Lichtenstein’s Lightstone Group declaring their intentions soon after, following months of quiet after American-issued real estate bonds collapsed early this year.

Lightstone Group’s Series A bonds carry an interest rate of 6.05 percent, while Spencer’s three bond series carry rates of 3.9, 5.15 and 7.23 percent, respectively.

Update: This story has been updated to include a statement from Silverstein Properties. 


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