Jeff Sutton raises $233M on Tel Aviv bond market

Investor demand for retail mogul's bonds hits $500M

Jeff Sutton
Jeff Sutton

Jeff Sutton completed an institutional tender on the Tel Aviv Stock Exchange, raising $233 million at an interest rate of 3.9 percent.

The retail mogul began with a $100 million bond offering, and then more than doubled that to $243 million after demand from investors reached almost $500 million. In the public tender, which is slated to occur in the next week, Sutton can raise an additional $30 million.

The interest rate is the lowest for an American company on the Tel Aviv market, coming in below the similarly rated Moinian Group, which raised $361 million at 4.2 percent in March 2015. Sutton’s firm was rated AA- by the Israeli rating agencies. The rate is also lower than the 3.95 percent on Yoel Goldman’s offering last week, however that deal was structured differently, since it served as a first mortgage on a single asset.

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While the spread is narrowing, the 3.9 percent interest rate remains above what an Israeli company would trade for.

Sutton’s bond is backed by an 18-asset portfolio valued at $833 million and includes prime Midtown assets, Like 747 Madison Avenue, home to Givenchy, and 29 and 40 West 34th Street, home to American Eagle.

Victory Consulting’s Gal Amit and Rafael Lipa, who advised Sutton on the offering, declined to comment.