Aya New York Exits Israeli Bond Market, Refinances $104 Million Debt

Aya New York, a real estate investment and hospitality firm focused on Manhattan, has signed a memorandum of understanding for a $104 million refinancing deal with a major U.S. banking corporation. This new financing will replace approximately NIS 292 million ($78 million) in debt the company previously raised in Israel earlier this year. The company plans to repay its bondholders in full, including accrued interest, about two and a half years ahead of the original maturity date.

The decision to exit the Israeli bond market was initiated by Aya New York as part of a strategic review of its financing structure. The company received several financing proposals from leading U.S. banking institutions and opted for a U.S. bank-based alternative. International real estate giant JLL is leading the refinancing process.

Aya New York's strategy centers on acquiring high-end properties in prime Manhattan locations, often through distressed sales, followed by rapid value enhancement. The firm has developed a capacity for swift due diligence and deal closure, enabling it to acquire top-tier assets at significant discounts to market value. Its current portfolio includes five income-generating properties in prime Manhattan locations: three multifamily residential buildings and two hotels.

Notable properties in Aya New York's portfolio include the Riverside buildings on the Upper West Side, comprising 82 residential units that underwent extensive renovation, and the Renoir House on East 63rd Street, a 151-unit residential building where the company implemented design and value-add changes. It also owns the Lady D hotel in Midtown Manhattan, featuring 166 rooms and approximately 9,000 square meters of commercial space within a 48-story luxury residential tower.

The company's move to repay Israeli bondholders stems from a belief that continuing to manage public debt in Israel would impede its desired growth pace. This decision was also influenced by negative sentiment in the local capital market towards real estate companies incorporated in the British Virgin Islands (BVI), despite Aya New York's distinct operational quality and asset backing. Consequently, the company decided to redirect its resources towards its core business of acquiring, improving, and managing real estate in New York.

The bond repayment, at par value (100 cents on the dollar), is expected to be completed within 45 days of approval by the bondholders' assembly. Aya New York may extend this period by an additional 30 days if it provides written confirmation from its financing institution that the refinancing process is ongoing. Amir Shiriqi, controlling shareholder of Aya NYC, stated that while they appreciate the trust from Israeli investors, the company believes it's best to rely on U.S. banking sources, which have been successfully utilized in the past. He highlighted the significant financing secured as a testament to the quality of their assets and business resilience, emphasizing their commitment to a swift and respectful completion of the repayment and continued focus on growth.