Kohan: The 2026 Refinancing Map After Series A

Where Series A Actually Bought Time

The main article argued that Series A bought Kohan time. This follow-up isolates the mechanics behind that claim: which short and expensive loans the bond is meant to replace, how much real cushion exists after the issuance, and what the first real proof point will be if refinancing is moving from theory to a working capital structure.

The picture is sharper when the debt wall is mapped asset by asset. Across the five properties in focus here, 311 South Wacker, Valley Mall, Southern Park Mall, Santa Fe Mall, and New Towne Mall, year-end 2025 debt totals about $56.7 million at a blended rate of roughly 14%, with maturities concentrated between February and June 2026. The rating report says Series A proceeds are intended to repay about $86 million of senior debt across eight pledged assets. That means these five properties alone explain roughly two-thirds of the refinancing wall the deal was built to address.

What matters is that the problem is not a crude absence of collateral. On year-end 2025 fair values, these five assets carry about $148.5 million of value against $56.7 million of debt, an implied ratio of about 38%. So the question is not whether the assets exist. The question is what kind of assets sit behind each loan, how quickly double-digit bridge debt can be turned into longer-term money, and how much of that apparent cushion is actually accessible once the debt migrates into a secured public bond structure.

That is where the retail assets and 311 South Wacker stop looking alike. Across the four malls, the debt is still expensive, but year-end occupancy ranges from 72% to 93%, and in three of the four cases from 89% to 93%. At 311, the debt is similarly expensive, but it sits on an office building that ended 2025 only 43% occupied. So Series A did not create one uniform cushion. It mainly transferred pressure from a short bridge layer into lower-cost public debt while leaving the hardest operating question inside the office asset.

The Loan Map Series A Was Meant To Replace

That chart makes the core point clear. This is not one refinancing wall. It is five bridge loans with the same headline symptom but very different collateral quality. 311 South Wacker is the largest single maturity. Valley Mall is the most stretched versus fair value. Southern Park and Santa Fe look much easier to imagine in permanent financing.

The four retail assets carry most of the cushion. Together they stand at about $36.7 million of debt against roughly $103.0 million of year-end fair value, an implied ratio of about 36%. That does not make refinancing automatic. It does mean Kohan's 2026 issue is not simply classic overleverage. It is the challenge of turning edge-market assets financed with expensive bridge money into a more institutional debt stack.

At 311 the story is different. Even there, $20 million of debt against $45.5 million of fair value does not look extreme on paper. But paper value and 43% occupancy are not the same thing. The loan also carries a minimum debt-service coverage ratio of 1.50. If that threshold is breached, the lender can shift cash flows into a cash-management regime until coverage is restored. The filing says the covenant was met as of September 30, 2025, but its existence underlines the point: 311 is not just an expensive loan. It is an expensive loan sitting on an operating asset with far higher sensitivity.

This is also why Series A could happen in the first place. The debt is short and expensive, but in most of these properties it does not sit on a wafer-thin collateral layer. The next implication follows directly from that: if refinancing later stalls, the likely reason will be asset quality, sector exposure, market terms, or the collateral mechanics themselves, not a simple absence of value.

What The Bond Really Replaced

After the balance-sheet date, Kohan issued NIS 412 million principal amount of Series A, non-indexed, at a fixed 7.5% coupon. Principal amortizes in four uneven annual installments: 5% on July 31, 2027, another 5% on July 31, 2028, another 5% on July 31, 2029, and 85% on July 31, 2030.

That is the first important distinction. Series A did not erase refinancing risk. It moved it. Instead of a cluster of short property loans due in the first half of 2026, Kohan now has lower-cost public debt with a very large back-end concentration in 2030.

The use of proceeds matters just as much. The rating report does not present the deal as a pure liability-management transaction. It says about $86 million is intended to repay senior debt on eight pledged assets, while the remaining proceeds, after issuance expenses, are meant mainly for additional acquisitions and investments in existing assets. So refinancing and continued expansion are built into the same structure. That can work. It also means the market will watch whether the rate relief is quickly absorbed by new growth spending.

On a simple year-end balance basis, the five loans mapped in this follow-up carry almost $8.0 million of annual interest cost. If that same slice were refinanced one for one at 7.5%, the annual cost would fall to about $4.3 million. Before fees, transaction costs, and structural differences, the potential relief on this slice alone is therefore around $3.7 million a year. That is the time Series A bought: less cash burn on interest, a much lower near-term wall, and more time to move toward permanent financing.

But that should not be turned into an overly clean conclusion. Series A is dramatically cheaper than bridge debt at 13% to 14.5%, yet it is still not cheap money in absolute terms. It is also not unsecured money. It sits on eight pledged assets, which means every later refinancing step has to operate inside a much tighter collateral regime.

The Covenant Gives Cushion, But Barely Gives Freedom

This is the real center of gravity for the continuation thesis. At headline level, the trust deed looks reasonably permissive: debt-to-collateral must stay below 80%, equity must remain above $120 million, net debt to net CAP must remain below 75%, and adjusted NOI must stay above $25 million. Distribution tests are tighter, but even there the debt-to-collateral ceiling is 72.5%.

The first real refinancing proof point, however, will not be judged against 80% and probably not against 72.5%. It will be judged against two lower gates:

That is the actual discipline. To release a pledged asset through a sale or refinancing, net proceeds have to be deposited directly into the trust account, and after that deposit the debt-to-collateral ratio must be no more than 62.5%. For the company to pull that cash back out later, the ratio has to fall to 45% or less. In other words, the cushion is real, but it is not free cash.

A rough calculation based on the rating report makes the point even sharper. Midroog frames a maximum NIS 425 million issuance as roughly $135 million against eight pledged assets with about $213 million of fair value. Using that same implied translation, the actual NIS 412 million issuance is about $131 million. That places the opening debt load of the bond at roughly 61% to 62% of the collateral pool on Midroog's September 30, 2025 value set. That is very comfortable against 80%, and still below 72.5%, but it is already very close to the 62.5% line that matters when the first pledged-asset refinancing or sale tries to release collateral.

That is why Kohan's real margin is not the full gap to the 80% covenant. Once the conversation shifts to the next move, meaning an actual refinancing of a pledged asset inside the bond structure, the effective headroom looks much tighter. The first proof point will not be just whether the company can replace 14.5% debt with a single-digit coupon. It will be whether it can do so without trapping most of the proceeds in the trust account.

The First Refinancing Proof Point Has Started, But It Is Not Complete Yet

The annual report already gives one encouraging sign that the path from bridge debt to permanent money is real. In January 2026, a subsidiary completed the refinancing of a $21 million loan at 6.75% over 15 years. The cross-reference from the debt note makes clear this is Robinson Mall. That is a real proof point, precisely because it shows that stronger retail assets can move into longer and cheaper financing.

But that still is not the proof point the market needs after Series A. The next test has to answer two questions at once:

1. Can Kohan turn the expensive 2026 bridge layer into longer-term financing beyond the one-time use of bond proceeds.
2. Can it do so inside the bond's collateral regime, without leaving proceeds trapped in the trust account and without eating through the structure's real debt-to-collateral room.

That also explains the hierarchy among the assets. The best refinancing proof point would not come from 311 South Wacker. It would come from one of the stronger retail assets. Southern Park and Santa Fe are the cleaner candidates, and under supportive terms Valley Mall could join that group as well, because those cases do not carry the same office-sector execution overhang. 311 may become the larger test later, but it is not the right asset from which to demand the first institutional confirmation.

So Series A really did buy Kohan time. It just did not finish the story. It remapped it. Instead of an immediate wall of expensive bridge loans, Kohan now has lower-cost public debt with a good collateral package, but with rules that make clear the cushion exists first and foremost to protect bondholders. The next catalyst is therefore not another financing headline by itself. It is the first refinancing inside the new structure that proves the portfolio can generate not only collateral value, but actual usable flexibility.