Kushner Cos.’ efforts to salvage its investment in the office tower at 666 Fifth Ave. in Manhattan drew fire early in the Trump administration.
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Kushner Cos., the family business of White House senior aide Jared Kushner, filed papers to raise at least $100 million by selling bonds in Israel.
The deal would be Kushner Cos.’ first capital raise on the Israeli bond market, as well as the largest unsecured capital raise by the family-controlled business that owns billions of dollars worth of apartments, office buildings and other commercial property in the U.S.
Kushner Cos. filed the papers this month with the Israel Securities Authority and would sell the bonds on the Tel Aviv Stock Exchange. The company has raised other forms of capital in Israel in the past from both banks and equity partners.
“Kushner is considering the option of issuing bonds on the Tel Aviv Stock Exchange,” a company spokesman said. “The company has had years of success working with Israeli institutions as both a borrower and a partner.”
Israel’s bond market has become a growing source of capital for U.S. real-estate companies, including Extell Development, Silverstein Properties Inc. and Starwood Capital Group.
Still, the move by Kushner Cos. is likely to rekindle the criticism of the potential conflicts of interest between Mr. Kushner’s role in the White House and his family’s business. Mr. Kushner, who is also President Trump’s son-in-law, has played a lead role in advancing the administration’s Middle East agenda.
Also, Mr. Trump this month pardoned Mr. Kushner’s father, Charles Kushner, who was sentenced in 2005 to two years in prison after pleading guilty to tax evasion and witness tampering.
A spokesman for the White House declined comment.
After joining the Trump administration, Mr. Kushner sold personal stakes in Kushner properties to family members to protect against conflicts, but some critics say he didn’t go far enough.
Reporting couldn’t determine what role, if any, Mr. Kushner will have in the family business after Mr. Trump leaves office on Jan. 20.
Kushner Cos.’ bond sale in Israel would likely take place in the first quarter of 2021. The Kushner spokesman declined to say what the company would do with the proceeds. A number of real-estate investors have begun stockpiling cash in recent months in anticipation of a wave of distressed sale opportunities hitting the market because of the Covid-19 pandemic.
Kushner Cos. appears to be joining this effort. This month, it put a portfolio of 10 Maryland rental-apartment properties with about 5,500 units on the block. It could be worth as much as $800 million.
The company has raised other forms of capital in Israel in the past including loans from Bank Leumi and Bank Hapoalim, as well as equity investments from companies like Psagot Investment House and Harel Insurance Investments and Financial Services Ltd.
Kushner Cos. has steered clear of new fundraising from sovereign investors since early in the Trump administration when the family’s efforts to salvage its investment in the office tower at 666 Fifth Ave. in New York City set off a firestorm of criticism. At one point, the elder Mr. Kushner was negotiating with China’s Anbang Insurance Co., which had close ties to top Chinese officials.
Mr. Kushner’s talks with Anbang never led to a deal. Kushner Cos. eventually sold a long-term lease of 666 Fifth Ave. to Brookfield Asset Management.
Write to Peter Grant at [email protected]
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Appeared in the December 30, 2020, print edition as ‘Kushner Cos. Seeks to Sell Bonds in Israel.’
This post first appeared on wsj.com
