All Year Management Pauses Bond Payments as Finance Efforts Falter
Brooklyn developer All Year Management has paused payments on its corporate bonds on the Tel Aviv Stock Exchange as the coronavirus hampers its financing efforts, according to documents filed with TASE.
The suspension, which puts All Year in default, was announced Sunday and has sent bond prices plummeting for all four of its outstanding bond series, to less than 50 cents on the dollar in some cases. As of Monday, its series B bond was scheduled to be pulled from several indices beginning Dec. 1.
The move comes after All Year failed to close on several high-profile deals, including a refinance for a 900-unit Bushwick housing complex, and a roughly $350 million portfolio sale, both of which were in the works before the pandemic.
In addition, Israeli rating company Midroog put All Year on credit watch early in the summer, and downgraded its bonds, triggering a rise in the interest rates. A variety of smaller deals are putting the squeeze on All Year as well, as loan deadlines keep encroaching, triggering defaults and other consequences, such as higher interest rates and stricter terms.
As of last month, Yoel Goldman’s All Year was nearing a deal for a $652 million loan from Citi Real Estate Group and Goldman Sachs (GS) to refinance the Bushwick project, known as Denizen, but the deal has not yet been finalized. The funds would be used to pay down the existing $371 million in debt on the property, as well as $247 million in secured bond payments in Tel Aviv, according to a report from Morningstar. The CMBS deal has been under discussion in various forms since at least February, when All Year signed a non-binding deal for a $675 million loan that was supposed to close in March.
In addition, All Year had been in talks talks with David Werner Real Estate Investments and Isaac Kassirer’s Emerald Equity Group over a portfolio sale valued at roughly $350 million in March, but the closing was delayed in May and negotiations broke down. The parties came back to the negotiating table in July, and the sale was set to close in September, but the buyers missed a deposit in August, according to documents filed on TASE. In a report detailing the reasons behind the suspension, All Year said the $344 million deal for the portfolio, which includes 74 buildings in Brooklyn, was still on the table, though it did not mention if it was the same buyers.
All Year has four bond series in Tel Aviv, two of which are secured, one by the William Vale Hotel in Williamsburg, and the other by Denizen. The two secured bonds have dropped less precipitously than the unsecured bonds.
All Year declined to comment.