Amir Shriki’s Aya New York has closed a $104 million refinancing with Citibank, completing its exit from Israel’s bond market and returning to traditional bank financing.
The loan is secured by two Manhattan multifamily properties: the 151-unit Renoir House at 225 East 63rd Street on the Upper East Side and a pair of Upper West Side buildings at 120 and 125 Riverside Drive. Proceeds will refinance existing debt, including the full repayment of Aya’s Series A bonds, which were listed on the Tel Aviv Stock Exchange.
JLL’s Scott Aiese and Alex Staikos arranged the financing, which closed a month after bondholders approved the company’s plan to buy out its Israeli debt. Shriki had previously said the new loan would carry an interest rate of roughly 6 percent, compared with the 7.7 percent rate on its Israeli bonds.
The refinancing marks the end of a short stint in Israeli capital markets for Aya New York, which raised approximately $96 million through a British Virgin Islands entity and entered the Tel Aviv Stock Exchange’s bond market in February. The company initially viewed the bond offering as a potential springboard for future fundraising and acquisitions.
But a deteriorating appetite for Israeli bonds issued by American real estate companies prompted a change of plans, Shriki said, pointing to heightened scrutiny of BVI-based borrowers following troubles involving other U.S. real estate operators, including Simad Holdings and GFI Capital.
Aya’s own bond offering also encountered turbulence. In July, the company’s second-quarter financial statements disclosed that certain subsidiaries had entered into merchant cash advance agreements, selling future receivables at properties already pledged as collateral to bondholders.
Shriki said he was unaware of the liens and resolved the issue within 48 hours of discovering them. Still, holders of roughly 45 percent of the bonds appointed attorneys to represent them and alleged violations.
In October, bondholders voted 99.6 percent in favor of the buyout, allowing Aya to repay the debt at par value, roughly two and a half years ahead of its scheduled maturity and without a prepayment penalty.
Read more
Aya New York wins approval to exit Israeli bond market 2 years early
After rocky run, Amir Shriki calls it quits on TASE: “They’ll eat you alive”
Why reforms in the Israeli bond market didn’t stop the Shabselses
