Volkswagen UK showroom owner raises £311m in Tel Aviv

Yitzchak Suari photo: Tamar Matsafi
Yitzchak Suari photo: Tamar Matsafi

The company, Chamoss, has several prominent Israeli businesspeople among its shareholders.

The major bond offering by Chamoss in Tel Aviv was completed last Thursday. The company, among whose shareholders are several prominent Israeli businesspeople, raised NIS 1.5 billion (£311 million) in an offering of series A bonds. The offering was led by Leader Underwriters, with leading insurance companies and provident funds participating. The bonds will be tradable between financial institutions via the TACT-Institutional system on the Tel Aviv Stock Exchange.

Chamoss is a privately-held company that was incorporated in 2005 in the British Virgin Islands in order to buy from Volkswagen UK a portfolio of 85 real estate assets and to lease them back to Volkswagen. The properties are used for showrooms for Volkswagen Group vehicles (Volkswagen, Audi, Seat, and Skoda), and are located all over the UK. Among the shareholders in Chamoss are Toyota importer George Horesh, the Allied fund headed by Yitzchak Suari, Igal Ahouvi, and Zvi Biran.

The purchase of the properties was financed by a bank loan, secured on them. The proceeds of the current offering will be used to repay the loan, with the bondholders receiving a full and first lien on the properties.

From the figures that Chamoss provided to the institutions it emerges that the assets are worth a total of £454 million (NIS 2.2 billion). NOI in 2017 was £28 million (NIS 135 million), of which the company's share was £27 million, 1% less than in 2016.

The bonds will be mostly be repaid in ten years' time, and have a duration of 6.8 years. They were issued with a sterling-linked interest rate of 4.3%, but until they are listed for trading they will bear interest of 5.1%, giving a spread of 391 basis points over equivalent UK government bonds, and 335 basis points over equivalent Israel government bonds.

The bonds were rated Aa3 by Midroog.

Published by Globes [online], Israel business news - www.globes-online.com - on May 22, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

Yitzchak Suari photo: Tamar Matsafi
Yitzchak Suari photo: Tamar Matsafi
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