Published On: Tue, May 5th, 2015

Jeff Sutton to Raise $500 Million in Bonds on the TASE

This marks yer another American real estate firm issuing bonds in Israel.

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Tel Aviv Stock Exchange TASE

Another American real estate mogul is looking to raise money by floating bonds on the Tel Aviv Stock Exchange. Jeff Sutton’s Wharton Properties (BVI) published a prospectus to raise $500 million (NIS 2 billion), Globes has reported.

This will be one of the largest amounts ever raised in the TASE. Sutton joins an elite group of American’s who have also floated bonds in Tel Aviv. He joins David Marx’s MDG Real Estate Global, Spencer Equity Group, All Year Holdings, controlled by Yoel Goldman, Lightstone Enterprises, controlled by David Lichtenstein, Extell Development Co. and Zarasai Group Ltd.

Tel Aviv has become ever more attractive to American real estate barons looking to raise capital through bond issues. So what is the big attraction? Better interest rates.

Also, the success of startup nation, which has brought with it an influx of billions of Dollars in hard cash, has left Israeli businesspeople with a lot of available capital to invest.

It is also easier for them to issue bonds in Israel than in the U.S. where such bonds can only be distributed by REITs.

Last year American real estate firms sold $14.6 billion worth of bonds on the Tel Aviv Stock Market, Bloomberg has reported. This marked a 40% increase from the same period last year.

The debt is being issued in Shekels because it is cheaper for borrowers to sell bonds in Israeli currency and convert it to dollars than it is to issue in greenbacks directly. The Tel Aviv Bond 40 Index reached a near record bringing $86 billion into its corporate bond market.

Israel Shimonov, founding partner at Shimonov & Co. Advocates which helps U.S. Firms issue bonds in Israel, told Bloomberg, “Institutional investors and pension managers are thirsty for investment as money in the bank hardly yields anything. The government does not issue enough bonds, and equity listings are limited. Nobody is coming to Israel because of pretty eyes. The underlying economics works for them.”

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