Silverstein Breaks the Ice, Raises $50M on Tel Aviv Bond Market
Larry Silverstein’s Silverstein Properties raised over $50 million on the Tel Aviv bond market, in the first test of the market after a months-long meltdown, according to documents filed by the Tel Aviv Stock Exchange.
Silverstein expanded the company’s Series-A bond, offering up to an additional $51 million (NIS 185 million). In the institutional round, which took place Wednesday, the issuance was vastly oversubscribed, with investors submitting $130 million (NIS 460 million) worth of bids, Globes first reported.
Silverstein accepted roughly $50 million, at 97.6 cents per bond, which works out to a 4.1 percent yield.
Silverstein entered the Israeli bond market in May 2018, raising $175 million (NIS 633 million) at the time, and is one of the larger New York players to have raised money on the Israeli debt market.
Since then, investor appetite for U.S. real estate-backed debt waned, and then nearly collapsed, after defaults by and investigations into several U.S.-based real estate companies scared off investors. All of the American companies in Tel Aviv suffered declines, but Silverstein was one of the few to remain relatively unscathed.
This issuance likely broke the ice, said Nadav Berkovich, an analyst at Tel Aviv-based investment firm Poalim IBI. It’s the first issuance by an American real estate company since Silverstein’s debut in May and an indication that investors are differentiating between the American companies on the market, Berkovitch said. “It’s a message to the stronger companies that investors see them differently, and if they wanted to raise capital here, they can.”
In anticipation of the offering, rating agency S&P Maalot rated Silverstein with a AA rating. The underwriting arm of Leader Capital Markets underwrote the deal.
Silverstein Properties declined to comment.