US Real Estate Firm GFI Seeks Three-Year Delay on Bond Repayment in Tel Aviv

American real estate company GFI, controlled by entrepreneur Alan Gross, has requested a three-year extension to repay its outstanding bonds issued in Tel Aviv. The company, which currently owes approximately 262 million shekels across two bond series, asked bondholders to postpone full repayment originally due by December 1, 2024, to the end of 2029. This request follows concerns that GFI may lack sufficient funds to meet its principal and interest payments on the bonds.

In exchange for the extension, GFI offered to pledge its rights to the Beekman Hotel in Manhattan, valued at around 310 million dollars. The hotel has 287 rooms with an average occupancy rate of 80%. GFI stated that market conditions are improving and expects attractive opportunities to sell hotels over the next three years, which would enable full repayment to investors in Tel Aviv.

The company also cited the impact of the war with Iran, which has increased inflation and reduced international tourism to New York, complicating its debt refinancing efforts. Following the announcement, the price of GFI’s Series E bonds plummeted, trading at a junk yield of 169%, signaling investors’ lack of confidence. The yield on the other bond series also surged to 27%.

GFI has been active in the Israeli bond market for about 12 years, raising approximately 1.2 billion shekels in six series, of which it has repaid about 956 million shekels. This is not the first time the company has faced financial difficulties, previously requiring capital injections from its controlling shareholder to meet obligations. The recent developments come amid a series of foreign companies struggling to fulfill debt commitments in Israel’s bond market.