Cornerstone to raise NIS 240m on TASE

Tel Aviv Stock Exchange Photo: Eli Yizhar
Tel Aviv Stock Exchange Photo: Eli Yizhar

The US real estate company's bonds, which will bear 6.25% annual interest, are repayable in five annual payments.

US real estate firm Cornerstone Properties wants to join what is emerging as another wave of debt offerings by foreign companies on the TASE, following a previous wave of offerings less than a year ago. That wave vanished following the collapse of Canadian company Urbancorp.

Controlled by Jorge Lopez, Leon Wolfe, and Mara Mades, Cornerstone today published a supplementary prospectus for a NIS 240 million bond issue. The company thereby joined Igal Namdar's Namko Realty and Southern Properties, which earlier this month published prospectuses for offerings of NIS 300-350 million each.

Like the other companies that have raised debt in Israel, Cornerstone is incorporated in the Virgin Islands. In its offering, managed by Discount Underwriting and Issuing, Cornerstone is offering bonds with up to 6.25% annual interest, repayable in five annual payments at the end of January in 2019-2023.

Cornerstone Properties, which is part of the Cornerstone Group, is active in income-producing residential real estate, with an emphasis on affordable rental housing in Florida. Its properties are no longer eligible for a tax credit; Cornerstone has either bought them from its financial partner, or is likely to attempt to buy the partner's share in them.

One of the interesting features of this prospectus is that $40 million, most of the money to be raised, is earmarked for a deal signed in October 2015 for the purchase of rights in properties belonging to Stuart I. Meyers. This amount includes $27 million in Meyers's outstanding debt for the purchase of the properties and $13 million more for the controlling shareholders in respect of the amounts they paid Meyers to date in the deal.

Published by Globes [online], Israel business news - www.globes-online.com - on November 29, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

Tel Aviv Stock Exchange Photo: Eli Yizhar
Tel Aviv Stock Exchange Photo: Eli Yizhar
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