Stock market declines (photo by shutterstock)
The underwriter Yonatan Cohen is not stopping and after the off-bank credit company Nakai Behiv ran into difficulties that led him to offer investors a 60% haircut, he is bringing to the market a new deal with the American real estate company MDG, as ice has learned.
MDG already owns several series of bonds on the stock exchange that trade at a double-digit yield. For example, the company’s Series 3 at a P/E of 1.49 trades at a yield of 11.5%, a yield that, how shall we put it mildly, does not reflect too much investor confidence.
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If so, this time Cohen is releasing the company’s new Series 5 which is offered to investors with a lien on the company’s property in New York. The series is short at 2.12% which will carry a maximum interest rate of 7.75%, an interest rate that reflects an effective annual return of 8.16%. The new series is rated by a Baa1 rating.
MDG ended the first half of 2022 with equity of $311 million, revenue of $41.3 million, NOI of $30.3 million and FFO of $7.9 million.
The company will grant a lien on a new property it owns that is leased to the City of New York.
Let’s recall that Yonatan Cohen made his fortune as an underwriter in the capital market. Not many years ago he decided to switch sides and acquire control of a backup company that dealt in non-bank credit. After a not long period, suspicions of irregularities were discovered in one of the company’s branches, which put it in a situation where it cannot even determine the value of its collectible assets.
The working assumption established on the basis of an audit report commissioned by Besif is that the lost debts of Besif are about NIS 100 million.
In recent weeks, Cohen offered the bondholders of Backing a 57% haircut. The bond holders to whom the company owes NIS 137 million refused Cohen’s offer, and then according to the trustee, the Hermetic Company, it was discovered that Backing paid off a 100 million NIS debt to the banks, which they claim constitutes creditor preference.
In recent days, the court appointed temporary trustees for the company and prohibited its disposition. At the same time, the Securities Authority is conducting an investigation against the company and its organizations on suspicion of defrauding investors and embezzlement.
Today, as mentioned, Yonatan Cohen is issuing a new series of bonds to the market, not that there are any suspicions against Cohen who, according to estimates, lost a sum of 50 million shekels in the backing, but still as long as the details of the backing have not been clarified in full, the institutions only received (and rejected) a few days ago an offer for a haircut Backing up will have to give their opinion on this story.
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