My Town: How Much of the Bond Is Really Covered, and When the Collateral Can Turn Into Cash
At year-end 2025, My Town's Series A bond looked covered on paper: net bond liability stood at NIS 63.2 million against NIS 92.2 million of pledged project surpluses. But that cover is built almost entirely on future project releases rather than on already pledged cash, so the 2026-2027 test is mainly a timing test.
The main article already established the real bottleneck at My Town: the value exists inside the projects, but the financing bridge matters until the surpluses are actually released to the company level. This follow-up isolates only the bond layer. Not the whole company, but three narrower questions: how much of Series A is truly covered at the end of 2025, how much of that cover is already cash sitting inside the collateral package, and in what sequence the pledged assets can realistically turn into money.
The short answer has two parts. On paper, the bond is covered. In cash terms, barely. In the covenant table, the company shows net bond liability of NIS 63.2 million against NIS 92.2 million of pledged assets, which translates into a debt-to-collateral ratio of 68.5%. But the same table also shows that financial collateral, actual cash or deposits already sitting in pledged accounts, was zero.
That is where the gap between “coverage” and “liquidity” begins. The pledge package is built from five projects under execution: Biltmore 12, Dizengoff 78, Brandeis 9, Zhabotinsky 105, and Alexander Yannai 8-10. These are future project surpluses, subject to construction progress, Form 4, full repayment of senior project debt, and lender approval. So the real question is not only whether NIS 92.2 million exceeds NIS 63.2 million. The real question is when that NIS 92.2 million can begin to move.
The Bond Looks Covered on Paper, Not in Cash
The short covenant table says more than it seems to at first glance:
| Item | NIS m | Practical meaning |
|---|---|---|
| Net liability value of Series A | 63.172 | Outstanding principal plus accrued interest |
| Financial collateral | 0 | There is no pledged cash or deposit cushion already in place |
| Value of pledged assets | 92.208 | The entire cover comes from five projects only |
| Debt-to-collateral ratio | 68.5% | The company reports compliance, but the filing itself shows two different ceilings: 70% in note 17 and the separate-company note, versus 270% in the dedicated bond appendix |
So the nominal coverage exists. Add up the five projects and the bond still shows about NIS 29.0 million of nominal surplus cover above the net liability value of the series. But that cushion is not sitting in cash. It exists only if the published project schedules, economics, and lender-release mechanics actually arrive as planned.
The subtler point is not only the ratio itself, but also the quality of the disclosure around it. The ratio is 68.5% everywhere the company presents it, but the ceiling is not described consistently. Note 17 and the separate-company note say the ratio may not exceed 70%, while the dedicated bond appendix prints a 270% ceiling. The company concludes that it is compliant either way, but the inconsistency itself matters, because it changes whether the reader should understand this covenant as tight or as very wide.
The project tables say the same thing in a different language. Across the five pledged projects, amounts already withdrawn by the report date were still zero. In other words, the pledged layer had not yet turned into available cash for the series at the end of 2025. This is not a bond backed by a cash cushion. It is a bond backed by a future-surplus cushion.
The Timeline of the Pledge Package Is the Real Story
At that point the total number stops being enough, and the timeline becomes the story. Once the five projects are laid out by expected surplus-release timing, the package looks much less uniform:
| Project | Expected withdrawable surplus (NIS m) | Expected release timing | Sales rate at end-2025 | What matters here |
|---|---|---|---|---|
| Biltmore 12 | 17.411 | Q2 2026 | 56% | The only project meant to open the 2026 release cycle |
| Dizengoff 78 | 8.297 | Q1 2027 | 57% | Meant to join early in 2027 |
| Brandeis 9 | 12.847 | Q3 2027 | 20% | Adds a mid-sized layer, but only in late 2027 |
| Zhabotinsky 105 | 27.866 | Q1 2028 | 8% | The largest single source of cover, but late |
| Alexander Yannai 8-10 | 25.787 | Q2 2028 | 31% | Another large source of cover, also late |
This immediately changes the reading. NIS 53.7 million, about 58% of the full pledge package, is only supposed to become withdrawable in 2028. Put differently, most of the bond cover sits in the back end of the timetable, not in the front end.
That chart explains why Biltmore 12 matters far beyond its NIS 17.4 million nominal contribution. The first principal payment date for the bond is April 1, 2026, while the first pledged project is only expected to release surplus in Q2 2026. So on the company’s own disclosed schedule, the first principal date arrives before any expected surplus-release quarter has actually passed.
And this did not remain theoretical. After the balance-sheet date, the company disclosed that Form 4 at Biltmore 12 was delayed beyond expectations, that the release of project surplus was therefore postponed, and that the company took a roughly NIS 9.3 million non-bank bridge loan because of that delay. This is the exact real-world version of the timing problem: the collateral exists, but when the first release point slips, the company does not pull surplus, it pulls bridge debt.
There is also one small but meaningful legal nuance inside the project tables. In four of the five projects, the lender undertaking is described directly: once surplus is released by the project lender, it is to be transferred into the surplus account until the full bond liability value is covered. In Dizengoff 78 the wording is softer, and the company says it will act so that the lender undertakes this. That may ultimately prove technical, but in a bond-focused read it still matters, because not all pledged projects are described with exactly the same degree of legal certainty.
Where the Funding Gap Opens
If someone looks only at the bond’s own amortization table, the story can seem calmer than it really is. The first principal payment is NIS 9.3 million on April 1, 2026, followed by NIS 6.2 million on April 1, 2027, then NIS 9.3 million on October 1, 2027, and only at the end, on October 1, 2028, comes the large NIS 37.2 million payment. On paper, the disclosed project-release timetable can still intersect with that bond schedule.
The problem is that the bond does not sit alone inside the company. Section 11.4 shows that available credit lines for the company and its wholly owned subsidiaries remained NIS 251.6 million both at year-end and at the report date, but actual drawn credit jumped from NIS 33.7 million at year-end to NIS 97.8 million at the report date. That is a very important data point, because it means the bridge was already being consumed before the first pledged layer had turned into released cash.
Note 12 adds that the parent company has a solo credit line of up to NIS 7 million, and that by the report date the company had fully utilized that framework. Out of that amount, NIS 6 million was already classified as long-term debt. So even at the parent level, not only at the project level, part of the available flexibility had already been used up.
That chart is the core debt read. If the pledged package is isolated against the near-term financing layer, the early buckets are much tighter than the headline collateral number suggests. Within one year, expected pledged releases are NIS 17.4 million, versus NIS 9.3 million of bond principal and NIS 21.9 million of bank and other credit cash flows. In the following one-to-two-year bucket, expected pledged releases are NIS 21.1 million, versus NIS 15.5 million of bond principal and NIS 14.3 million of bank and other credit cash flows.
This does not mean the company necessarily cannot get through 2026 and 2027. But it does mean something more important for the bond read: the pledge package alone is not the layer that funds the interim period. It is built better to protect the final value of the series than to solve the next few quarters by itself.
That is also why the Biltmore 12 delay mattered so much. It did not cancel the total coverage of the series, but it hit exactly the point where the collateral was supposed to become cash for the first time.
Bottom Line
At the end of 2025, My Town’s Series A bond still looks like a series with reasonable project-level coverage: NIS 63.2 million of net liability value against NIS 92.2 million of pledged project surpluses, and a debt-to-collateral ratio of 68.5%. That is the first important fact.
The second important fact is that the cover is almost entirely future-dated. There is no financial collateral, and across the five pledged projects no surplus had yet been withdrawn by the report date. Only one project, Biltmore 12, was supposed to begin releasing surplus during 2026. That was also the exact project that slipped after year-end and forced bridge borrowing.
The third important fact is that the filing is not fully self-consistent on the covenant wording itself: one part of the annual report shows a 70% ceiling, while the dedicated bond appendix shows 270%, even though both use the same 68.5% actual ratio. That does not change the company’s own compliance conclusion, but it does change how the market should read the true amount of covenant room.
So the right reading of the series is not “there is NIS 92 million of collateral, so everything is comfortable.” The right reading is different: there is NIS 92 million of expected pledged surplus, but the company still needs to cross 2026 and 2027 without letting the timing gap between collateral and debt service turn into materially higher funding stress. If Biltmore 12 is released, if Dizengoff 78 and Brandeis 9 stay roughly on schedule, and if credit-line usage stabilizes, the collateral can do its job. If releases keep slipping, the bond may remain covered on paper while the path to cash gets materially less comfortable.
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