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Israeli court ruled against developer seeking restructuring of bond debt

Urbancorp is one of just 16 North American real estate companies to borrow there

Tel Aviv Stock Exchange (inset: Urbancorp's Alan Saskin via LinkedIn)
Tel Aviv Stock Exchange (inset: Urbancorp's Alan Saskin via LinkedIn)

A judge in Tel Aviv ruled against a request by Toronto-based Urbancorp to restructure the debt it raised on the Israeli bond market.

The court appointed an officer with the power to dig into Urbancorp’s books and, in necessary, seize its assets, a development that may strike fear into the hearts of Israeli bond buyers and foreign property developers raising funds in Israel.

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UrbanCorp raised $180 million shekels, about $48 million, just a few months ago, with an 8.65 percent coupon. Prices on those bonds have since halved. The company’s israel directors and advisors have bolted, and trading in the securities has halted, Bloomberg reported.

The firm is one of just 16 North American property firms borrowing on the Israeli market, according to Bloomberg. New York players such as Gary Barnett’s Extell Development, David Lichtenstein’s Lightstone Group and Joe Moinian’s Moinian Group and others have all sought funding there.

“Urbancorp is an exceptional case and doesn’t represent the norm but as a result we are likely to see Israeli investors be more skeptical about future debt offerings by foreign real estate companies,” a Tel Aviv-based fund manager told Bloomberg. [Bloomberg]Ariel Stulberg

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