Following Simed and Cohen Scandals: Eagle Properties Raises 500 Million Shekels in Israel

While the Israeli bond market is still dealing with the echoes of two turbulent cases involving companies incorporated in the British Virgin Islands (BVI) — Simed and Cohen — another American real estate company is arriving to raise debt in Tel Aviv.

Eagle Properties is preparing for its first bond series issuance, aiming to raise about 500 million shekels. Unlike its predecessors, it comes with a package of protective mechanisms designed precisely to prevent the issues seen at Simed and Cohen. This raises an uncomfortable question regarding the regulator in Israel.

Eagle operates as part of the international real estate corporation RMC and focuses on the long-term holding and improvement of income-generating office assets in the US. The portfolio includes 24 office properties in states such as Illinois, Ohio, Tennessee, Kentucky, Florida, Texas, and Alabama, spanning about 9.1 million square feet (about 850,000 square meters) and valued at approximately 903 million dollars.

According to the company, about 65% of the portfolio consists of high-quality Class A assets. The total occupancy rate is about 78%, and the NOI for 2025 totaled about 69 million dollars.

For the issuance, the company recruited the services of former Israeli ambassador to the US, Danny Ayalon, who owns a consulting firm specializing in accompanying international companies on the Israeli capital market. The underwriting is led by Eximus Capital from the Israel Discount Bank group.

The company plans to raise about 500 million shekels in its first bond series (Series A), with an A3.il rating and a duration of about 3.5 years. Principal payments are structured as follows: 1% in each of the years 2027–2029, and a balloon payment of 97% in June 2030.

The maximum LTV was set at 65%. The purpose of the funds, as with previous BVI companies, is recycling: repaying expensive loans taken in the past. As part of the issuance, the company will pledge assets for the benefit of bondholders, including Embassy Park in Ohio, the tower in Jacksonville (Florida), and Highland Landmark and Corridors in Illinois, with an aggregate value of about 263 million dollars.

Protective Mechanisms

In the prospectus, the company detailed two main protective mechanisms:

1. Collateral Registration Protection: proceeds will be transferred to the company only after full registration of all required collateral. This directly addresses the Simed case, where concerns arose regarding double liens.

2. Transaction Approval Mechanism: a double signature is required for transactions over 250,000–500,000 dollars, with at least one signatory being independent of the controlling shareholder. Furthermore, transactions exceeding 5 million dollars require the approval and signature of a director residing in Israel. The company also announced its intention to appoint a board of directors that is mostly Israeli.

Recalling previous cases, the criticality of these measures is clear. In Simed, the Shabsal brothers transferred 34 million dollars to companies under their control without effective oversight. In Cohen, the controlling shareholder signed for property purchases and only retrospectively brought them to the board for approval, while withdrawing funds for private needs.

Regulatory Gaps

This raises the question: if these mechanisms are so basic and necessary, why are they a voluntary initiative rather than a mandatory regulatory requirement? BVI companies come to Israel because they are often too small to raise debt in the US under similar conditions. These are frequently family-run entities where the controlling shareholder is used to managing the business as private property rather than a supervised public company.

That the issuer must offer these protections indicates a regulatory gap. A uniform mandatory standard — such as a requirement for an independent Israeli director or a mechanism for releasing funds against collateral registration — would raise the protection bar for the entire market. While Eagle is taking the right step, it is doing so voluntarily, and future issuers may not follow suit.

For investors, Eagle's issuance is a case study. On one hand, the company has a diverse portfolio and protective mechanisms. On the other hand, the bottom line of the BVI cases remains: these are foreign companies with limited oversight of their owners' conduct abroad, and the excess yield offered is compensation for this risk. Eagle's mechanisms reduce the risk but do not eliminate it.