Delays in a pair of big deals and other pandemic fallout have All Year Management’s Israeli bonds in big trouble — again.
Yoel Goldman’s firm announced Sunday that it would be “temporarily halting” payments to bondholders for 30 days, including a payment on its Series B bonds that was due today. The developer is also delaying the release of its third quarter financials and has scheduled a bondholder meeting for Tuesday to discuss the situation.
“For clarification, as of the date of this report, the company has the financial resources to make the aforementioned payment,” All Year noted in a disclosure to the Tel Aviv Stock Exchange. “The board of directors has decided that at this stage, the company will continue to make payments on senior and secured loans, including secured bonds, and necessary operational expenses.”
All Year’s Series B and D bonds are unsecured corporate bonds. Its Series C bonds are secured by the William Vale hotel-and-office complex in Williamsburg, Brooklyn, and its Series E bonds are secured by the first phase of nearby Denizen Bushwick, a multifamily project on the site of the former Rheingold Brewery.
The value of all four bond series fell precipitously following the announcement, with the Series B bonds falling 42 percent from 67 to 39 cents on the dollar. All Year declined to comment.
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All Year’s financial position, which even before the pandemic was facing scrutiny from investors, has been hurt by the coronavirus in several ways. Occupancy in the developer’s portfolio has dipped to 85 percent, while the weakening of the dollar against the shekel has increased its financial obligations. The company’s bonds, like those of many other New York developers, have been downgraded in recent months.
459 Smith Street in Gowanus (Google Maps)
But the biggest challenge facing Goldman’s firm has been delays in the closing of two big deals that would help relieve the financial pressure significantly: the sale of a roughly $300 million multifamily portfolio to an investor group headed by David Werner, and a $650 million refinancing of the Denizen Bushwick.
In another filing, All Year disclosed that it has been missing payments on two loans since this summer, and is in negotiations with lenders to restructure those obligations, which include a $35 million preferred equity investment for a Gowanus development site on Smith Street, and a $65 million mezzanine loan on stage two of Denizen Bushwick.