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Copperline, owned by Chairman Jason Schlesinger, raised two series of bonds, A and B, in S&P Ma’alot’s A-Series, with NIS 474 million in debt. The long B bonds, which traded on the eve of the 16% yield postponed demand, responded with up to 7% rates, and the maturity yield increased to 18.5%. Copperline does not seek to introduce changes to the Series B settlement schedule and intends to transfer the trustee to full The amount to pay NIS 23.1 million on April 1.
Copperline was due to pay NIS 143.9 million to bondholders on April 20, of which NIS 4.2 million was interest, and NIS 139.8 million, as stated, to pay a final repayment of the debt. Copperline is now seeking to pay the bondholders the interest on the date and To pay NIS 7.3 million at the expense of the fund, with the balance of the unpaid fund NIS 132.5 million, Copperline seeks the consent of the holders to defer until no later than October 20, 2020.
16.3% rejection compensation
According to Cooperline’s offer, the deferred payment will bear NIS 10.8 million in interest, which will be paid in advance together with the upcoming payment. In addition, Copperline undertakes that any receipt due to it from the refinancing of assets, the sale of assets or the introduction of a partner will be transferred to the trustee for early repayment of the deferred payment. Also, until the full repayment of the deferred debt, Copperline will refrain from distributing a dividend and paying management fees to the company owners.
Copperline notes that in discussions with the A bondholders over the weekend, they informed her in writing that, subject to approvals to be received by the relevant committees, they would support her proposal at the meeting. Copperline’s request to postpone the bond’s A bond payment does not involve “haircut” and she Includes adequate compensation in the form of a prepayment of interest of 16.3%. However, this is an event that provides a glimpse of the challenges facing real estate companies in the US in the shadow of the Corona crisis.
Copperline’s rejection request comes precisely after the company recently completed several transactions that generated a positive cash flow. Copperline reported refinancing two loans, one in Villa Court property and the other in Freeport Randall property, which generated a surplus of $ 11.15 million. Copperline is also in the final stages of refinancing a loan for the Hayes House property, which is expected to generate $ 2.3 million in excess cash. The refinancing agreement has been signed, but its completion is being delayed as the county offices close due to the Corona crisis and Copperline are expected to complete the move this week. With respect to the Little Torch property whose loan is expected to be securitized, Copperline notes that the lender has announced that it has completed its due diligence and the company will be able to complete the refinancing when the frozen CMBS (mortgage backed bond) market reopens.
The most significant development for Copperline’s cash flow was the $ 75.4 million sale of the Harbor Inn property. Due to the Corona crisis, the buyer of the US, who lives in Canada, is unable to face the boundary between the states. The parties have agreed that the deal will be completed no later than six months or ten days from the date the Florida state authorities where the property is located will announce the reopening of Restaurants and shops for the public.
It was also agreed that the price of the transaction will not change, but $ 7 million of the proceeds will be paid as a recognized loan within three years of the transaction date. At the same time, the buyer released a $ 1 million down payment on account of the transaction and deposited another $ 1 million down payment in trust. Copperline estimates that the deal will be completed under its updated terms, and assuming it does so, it is expected to yield the company an immediate surplus of $ 18 million and $ 7.4 million after repayment of the seller’s loan.
Relight’s spin
Copperline’s request to postpone the payment comes a few days after another American real estate company went into a spin. Last week, Released released its annual reports that included drawing attention to its continued existence as a “living business.” Related debt is NIS 678 million towards the bondholders whose final maturity is at the end of September this year. These bonds are trading at a yield of 46%.
In a conference call for investors and at the holders’ meeting, Relate’s representatives stated that they believe the company could make the payment and that it is exploring several options to generate a debt service, including increasing existing financing on the company’s assets, selling assets and obtaining interim financing (Loan Mezzanine). Investors did not seem to be convinced by the optimism of the company’s management and in a part of the meeting held with no related representatives, it was suggested that an insurance company grower serve on the bond representative, and the trustee is currently asking other holders who want to join the bond representative to submit their candidacy.
The letter sent by the trustee yesterday, through attorney Raanan Clair and Alon Binyamini, states that “we have a serious situation in which, among other things, there is a real concern that the company will not be able to pay the final payment.” The letter presented a demand for information, including protocols regarding dividend distributions that the company Conducted in 2019, to present a solution to the situation created, as well as a requirement for Marilight to refrain from any material and harmful action. Related responded to these allegations through Attorney Aaron Michaeli, denying that it was trying to dwarf the severity of the situation or not acknowledging its severity and claiming that the trustee’s requirements were sweeping. And go far and doubt whether he is entitled to the contractor.
Self-procurement only on paper
In March, which was characterized by sharp declines in the bond market in general and in American companies in particular, 10 companies whose bonds traded on the Tel Bond Global Index announced plans to buy bonds of $ 154 million (NIS 550 million). It is Silverstein and Olier’s job to announce plans to buy $ 14 million and $ 10 million, respectively, and so far none of the companies have made use of their self-purchase plan, with the exception of EMG, which purchased NIS 1.1 million in bonds.
Copperline Embassy Hotel, Miami Beach, Florida Photo: Ambassador Cooperline
