Edited by: TJVNews.com
The issue of a possible conflict of interest in his role as senior advisor to his father-in-law, Donald Trump and those of his business interests have routinely insinuated themselves into the conversations about Jared Kushner since he was appointed to his White House position nearly four years ago,
Known for his sheer brilliance and business acumen, Kushner made the perfect aid to his father-in-law who just happens to be president. This year alone, Kushner represented the Trump administration in Middle East affairs when he, his assistant Avi Berkowitz and their team of negotiators brokered a historic deal that finally saw a rapprochement between Israel and some of her neighbors. Known as the Abraham Accords, this historic peace treaty has called for and realized the normalization of relations between Israel, the UAE, Bahrain and Sudan. Other countries such as Morocco are also on board with this lucrative and highly impactful deal.
On Thursday, the WSJ reported that Kushner Cos., the family business name of Jared’s company, filed papers to raise at least $100 million in capital by selling bonds in Israel.
According to the report, Kushner Cos. owns billions of dollars worth of apartments, office buildings and other commercial property in the U.S. The WSJ also reported that this signified Kushner’s first capital raise on the Israeli bond market, as well as the largest unsecured capital raise by the family-controlled business.
Previously, Kushner Cos. has raised other forms of capital in Israel in the past from both banks and equity partners, according to the WSJ report. The company filed the papers this month with the Israel Securities Authority and would sell the bonds on the Tel Aviv Stock Exchange.
“Kushner is considering the option of issuing bonds on the Tel Aviv Stock Exchange,” a company spokesman told the WSJ. “The company has had years of success working with Israeli institutions as both a borrower and a partner.”
His and Ivanka’s financial disclosures for 2019, made public in August, show that last year they earned $36 million, according to the Daily Mail of the UK.
The couple’s investments, mostly in real estate, were worth at least $204 million and as much as $783 million, as the UK report indicated.
According to the Daily Mail report, Kushner Cos appears to be ready to purchased distressed properties that have a taken a hit during this raging pandemic.
This month, it put a portfolio of 10 Maryland rental-apartment properties with about 5,500 units up for sale, in a move which could generate as much as $800 million, according to the British paper.
The WSJ reported that 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.’ bond sale in Israel would likely take place in the first quarter of 2021
Benjamin Netanyahu, the Israeli prime minister, has been for decades a family friend of the Kushners: Charles Kushner, Jared’s father and the son of Holocaust survivors, was a generous donor to Israeli causes, according to a report in the Daily Mail.
Netanyahu had even stayed at the Kushners’ home in New Jersey, sleeping in Jared’s bedroom – Jared, then a teenager, moved to the basement that night, according to The New York Times.
Trump this month pardoned Charles Kushner, 66, who was sentenced in 2005 to two years in prison after pleading guilty to tax evasion and witness tampering.
Jared, 39, took over as CEO of Kushner Cos in 2008 and stepped down in January 2016.
No one is quite sure what role, if any, Mr. Kushner will have in the family business after Mr. Trump leaves office on Jan. 20.
In February of 2015, the WSJ asked why some of New York’s biggest real-estate investors are heading to Israel to raise cash and reported that Israel has some key advantages.
The WSJ reported that large developers with good credit can sell corporate bonds for about 5%, often less than half what they would pay in the U.S. for a junior loan known as mezzanine debt. They also can issue debt in smaller chunks.
Meanwhile, some smaller real estate owners lacking enough of a track record to sell corporate bonds in the U.S. are finding buyers in Israel.
Investors—primarily Israeli mutual funds, institutional investors and wealthy individuals—are eager to gain exposure to the booming New York property market or to pick up more yield than they can get from comparable Israeli debt, Yossi Levi, an executive at underwriter Clal Finance Underwriting Ltd. told the Journal in 2015.
In the same WSJ 2015 report, it indicated that U.S. based real-estate owners could raise $2 billion to $3 billion annually in Israel over the next three years, according to One Ha’am, though the market is unlikely to exceed the $4 billion of real-estate bonds sold on the Tel Aviv Stock Exchange last year, including those financing Israeli companies investing abroad.
The 2015 report also said that Gary Barnett, who runs Extell, one of New York’s most prominent commercial developers of luxury real estate, said some borrowers are going to Israel because they can’t get similar financing in the U.S., where lenders can be wary of smaller or unproven developers and property owners.
“Some people have assets that they have had a hard financing [in the U.S.] and say, ‘Let’s see if we can get the Israelis to finance them,’” he said. “If there’s a little bit of a hiccup in the market, they may find it hard to pay back.”
Mr. Barnett’s firm sold $300 million of five-year bonds at interest rates between 6% and 7%, after fees and hedging costs. (wsj.com)
