NEW YORK (Dec. 19)
A $20,000,000 housing project for Israel, involving seven major American insurance companies; the Jewish Agency for Israel, Inc.; the Intercontinental Associates Inc., an American housing company established by a group of prominent real estate men headed by Jack D. Weiler of New York; and the Israel Economic Development Corporation (Chail), Ltd., was concluded this morning after an all-night teletype session with a group 6,000 miles away gathered around a teletype station in Tel Aviv.
This transaction involved $9,000,000 of 15-year secured notes purchased by a group of insurance companies headed by Aetna Life Insurance Company, which took the major share. The others include New England Mutual Life Insurance Company of Boston; Penn Mutual Life Insurance Company of Philadelphia; State Mutual Life Assurance Company of America of Worcester; and Phoenix Mutual Life of Hartford, all four of whom participated in previous deals of similar character. The Fidelity Mutual and the Provident Mutual, both of Philadelphia, completed the lending group.
This total loan made possible the construction by Intercontinental Associates, Inc., of 4,000 immigrant housing units which will take care of approximately 17,000 new immigrants, some of whom will arrive in Israel this year. These apartments are leased simultaneously to the Jewish Agency for Israel, Inc. which is responsible for immigration, absorption and rehabilitation of immigrants to Israel. The Jewish Agency for Israel, Inc. also guarantees the entire transaction.
This type of financing of low cost housing for Israel immigrants was originated in 1962 by a group known as American Associate;, Inc., headed by Mr. Weiler. This was quickly followed by a second transaction of a similar nature known as United Associates, Inc. The transaction concluded today is the third in the series, and accounts in the aggregate for 8,000 housing units over a period of two years.
Negotiations for the formation of Intercontinental Associates and its loan from the insurance companies were conducted, as in the two previous instances, by Gottlieb Hammer, executive vice-chairman of the Jewish Agency for Israel, Inc. Guzik and Boukstein, represented the borrowers, and Simpson Thatcher and Bartlett acted as special counsel to the lending companies.
WEILER GRATIFIED WITH CONFIDENCE EXHIBITED BY U.S. FIRMS
Intercontinental Associates, Inc., which provided the equity capital of $1,500,000, was organized by a group of well-known real estate experts. In addition to Mr. Weiler, they are: Charles B. Benenson, Irwin S. Chanin, Aron Chilewich, Abe Gevirtz, Samuel Lemberg, Solomon N. Petchers, Lawrence Schacht, Milton Schwartz, and Benjamin H. Swig of San Francisco.
Mr. Weiler, on behalf of the Associates, stated: “Two years ago we pioneered in establishing a pattern for immigrant housing which we hoped would relieve the Jewish Agency from the harrowing pressures of finding the means to finance large-scale immigrant housing. We are gratified to note the confidence which these seven major insurance companies have exhibited in the American Jewish community by making this loan.”
Mr. Weiler further noted that, “while the Israel housing budget for the coming year is in excess of $100,000,000, the transaction today is a significant contribution in the sense that it further demonstrates the willingness of the American Jewish community to continue to give generously to the United Jewish Appeal in order to provide adequate shelter as well as other basic needs for Israel’s newcomers.”
The balance of $9,500,000 of the financing of this deal was provided by Israel Economic Development Corporation (Chail) Ltd., of Tel Aviv, which purchased the junior stock of International Associates, Inc.