Bondholders voted overwhelmingly to approve Aya New York’s plan to exit the Israeli capital markets, allowing the firm to refinance its debt with a U.S.-based lender. Shareholders approved the buyout with 99.6 percent in favor, according to a trustee letter, clearing the way for the repayment of bonds 2.5 years before maturity without a prepayment penalty. The company will use a $104 million bank loan to settle the obligations, arranged by JLL Capital Markets, with an interest rate of approximately 6 percent, down from the 7.7 percent rate on the Israeli bonds.
Exit Strategy and Refinancing
The move represents a strategic shift for founder Amir Shriki, who entered the Tel Aviv Stock Exchange bond market in February with plans to expand. Aya initially raised 292 million shekels, roughly $96 million, through a British Virgin Islands (BVI) entity, aiming to use the bonds as a foundation for future offerings and acquisitions. However, Shriki concluded the strategy would not succeed, citing unfavorable market conditions for American companies in that market.
“The sentiment in the Israeli bond market for American companies, in my opinion, does not allow growth for the next year or two,” Shriki said. The BVI structure, common among U.S. real estate firms raising funds in Israel, became less appealing to investors after defaults by other firms, including Simad Holdings and GFI Capital. Shriki noted a “kind of discrimination” against those companies, though he acknowledged investor concerns following these defaults.
Market Challenges and Past Issues
Aya’s bond was secured by two Manhattan multifamily properties: the 151-unit Renoir House at 225 East 63rd Street and Riverside, a pair of Upper West Side buildings with 82 units at 120 and 125 Riverside Drive. Aya, which focuses on distressed value-add assets, faced complications when its subsidiaries sold receivables to merchant cash advance lenders, creating liens on properties already pledged to bondholders. Shriki said he resolved the issue within 48 hours of discovery, though 45 percent of bondholders had already appointed attorneys, alleging violations.
Simad Holdings’ bankruptcy in July, after owners David and Michael Shabsels defaulted on $214 million in Israeli bond payments and transferred $34 million to themselves, highlighted the risks. Similarly, Mike Kohan was removed as CEO of Kohan Properties, another BVI-based TASE-listed firm, after unauthorized loans and personal withdrawals were uncovered. These events intensified scrutiny of such structures in that market.
