Ram Aderet Follow-up: When Does Havatzelet Actually Release Cash After Bond Series D?
Bond Series D removed the mezzanine layer at Havatzelet, but it did not open the cash spigot yet. The second half of the proceeds still depends on a full building permit, the land facility was extended to June 30, 2026, and the project surplus itself is still framed as a 2027 to 2029 event.
What This Follow-up Is Isolating
The main article argued that Ram Aderet was still financing growth until project surpluses began turning from paper value into accessible cash. Havatzelet is the sharpest test of that argument. It is a project with expected gross profit of about NIS 80.2 million and expected pullable surplus of about NIS 165.7 million, but it also sits inside a financing stack that, until March 2026, still included senior debt, an equity-completion loan, and then Bond Series D secured on the project surplus.
The easy mistake is to assume Series D already “solved” Havatzelet. It solved only one part of the puzzle. The company raised about NIS 107.75 million par value, received only half of the proceeds at the company level, and used about NIS 29.5 million of that money to repay the full mezzanine loan from Phoenix. That is a real improvement. It is still not the same thing as the project releasing cash.
That is the core distinction. In March 2026 Havatzelet moved from being a mezzanine-repayment story to being a cash-access story. Those are not the same thing. The first one already happened. The second still depends on a full building permit, on bridging the land financing through the interim period, and above all on the project surplus meeting release conditions that sit much later in the project timeline.
The chart puts the scale in the right order. The equity-completion balance stood at about NIS 27 million at year-end 2025, and the company later disclosed that about NIS 29.5 million of Series D proceeds was used in March 2026 to repay the full mezzanine. Against that, the annual report presents Havatzelet’s projected pullable surplus at about NIS 165.744 million after mezzanine repayment. In other words, Series D did not create Havatzelet’s surplus. It only removed one financing layer sitting between the project and that future surplus.
What Is Actually Working At Havatzelet
The project itself looks material and commercially alive. After the zoning correction in Netanya, the project expanded to 192 units and about 2,500 square meters of commercial area. The company presents expected revenue of about NIS 572.2 million and expected gross profit of about NIS 80.2 million. By December 31, 2025 it had signed 113 sale contracts, and by close to the report date that number had risen to 123 contracts with aggregate value of about NIS 219.7 million. In the February 2026 presentation management showed a 63% marketing rate.
That matters because Havatzelet is not stuck in the commercial sense. The bottleneck here is not demand. The bottleneck is the project’s financing and permitting stage. As of year-end 2025 the company had started excavation and shoring works, but it still had not set a percentage of completion for the project. Even in the February 2026 presentation, management still described the full building permit as something expected only in the coming two months.
That gap explains why a reader who looks only at “projected surplus” can miss the point. A residential project can look strong on sales, gross profit and surplus, and still not be a near-term cash source. Havatzelet is exactly that kind of project right now.
What Series D Actually Opened
Bond Series D was completed on March 1, 2026 in the amount of about NIS 107.75 million par value, with a 6.9% annual coupon. In the March 11 report, the company said the conditions under section 7.3 of the deed had been completed and that half of the proceeds was transferred to the company on March 11. In the bond note, the company explicitly says the second half will be received only upon obtaining a full building permit for Havatzelet HaSharon.
That matters because it breaks the Series D event into two different stages:
| Step | What the local evidence says | What it means |
|---|---|---|
| The issuance itself | About NIS 107.75 million par value was issued at 6.9% | The company created a new financing source secured on Havatzelet surplus |
| The first transfer | Only half of the proceeds was transferred to the company in March 2026 | Not all of the issuance became liquid at the company level |
| First use of cash | About NIS 29.5 million was used to repay the full Phoenix mezzanine | The first use of the money was to clear an existing financing layer |
| The second transfer | The remaining proceeds depend on a full building permit | Even after the bond issue, the permit is still a financing trigger, not just a planning milestone |
The common mistake is to confuse mezzanine repayment with surplus release. The annual report itself helps prevent that mistake because the Havatzelet table presents the roughly NIS 165.744 million projected pullable surplus already after mezzanine repayment. That means Series D cleared one obstacle on the way to the surplus, but it did not automatically shorten the timeline for that surplus to become cash.
Why The Cash Is Still Not Free
The Second Half Of Series D Is Still Locked
In the Series D bond note, the company explicitly ties the remaining proceeds to a full building permit. The February 2026 presentation still described that full permit as a future event. By March 29, 2026 the company was already reporting an extension of the institutional credit facility at the project through June 30, 2026, but that same notice did not report receipt of a full permit. Taken together, that supports a narrower conclusion: by late March the company was still reporting extended land financing, while the second half of Series D proceeds remained contractually tied to a full permit.
There is also a time cost here. The deed says that if a full building permit is not obtained within six months of the deed date, the coupon on Series D rises by 0.125% until the permit arrives or the series is repaid, whichever comes first. So the permit delay is not only a planning issue. It directly affects financing cost.
The Land Loan Was Extended, Not Solved
The project-specific financing table shows a heavy financing structure even before Series D. At year-end 2025, Havatzelet carried about NIS 140.4 million of short-term debt, down from about NIS 161.5 million a year earlier. The lender is Phoenix, with senior debt at prime plus 1% and mezzanine at prime plus 5%. The total maximum facility stood at about NIS 590 million, yet the unused balance at year-end 2025 was only about NIS 0.41 million.
That last number is small, but important. This is not a project sitting on wide financing headroom at year-end 2025. It had already drawn almost all of the available facility. That is why the extension through June 30, 2026 does not look like a technical footnote. It says the project is still living on a land-financing bridge, even after the mezzanine was repaid.
This is where the distinction between two kinds of improvement matters. Mezzanine repayment improves the quality of the project’s capital structure. Extending the land facility is a reminder that the transition into a more stable financing setup is still incomplete. The project moved one step forward, but it has not yet cleared the whole middle passage.
The Surplus Itself Sits At The Back End Of The Project
The Havatzelet tables in the annual report say two things that are uncomfortable to read together, but need to be read together. On one hand, the company presents expected pullable surplus of about NIS 165.744 million after mezzanine repayment. On the other hand, the same financing table says that releasing surplus from the project account requires project completion, Form 4, engineer approvals, handover to buyers, full repayment of the project debt, and cancellation and return of all guarantees and policies, and it explicitly states that those conditions had not been met at the report date.
The meaning is straightforward: Havatzelet is a future surplus reservoir, not an open cash drawer. Even the company’s own timing for surplus extraction, 2027 to 2029, places the project’s cash release well after the March 2026 bond issue and the March 2026 land-facility extension. In residential development terms, that is the difference between an improving financing story and free cash already available at the company.
What The Presentation Adds, And What It Does Not
The February 2026 presentation helps explain why Havatzelet matters so much. It rounds the project’s pullable surplus to about NIS 166 million, and by simple calculation that is about 23% of the company’s cumulative projected surplus of about NIS 729 million by 2029. So Havatzelet is one of the largest surplus pools in the portfolio.
But the same presentation also sharpens the problem. Management presents a group-level surplus schedule of NIS 41 million in 2025, NIS 144 million in 2026 and NIS 169 million in 2027, while Havatzelet itself is framed in the annual report as a project whose surplus-withdrawal window sits in 2027 to 2029. That supports the read that Havatzelet is probably not the group’s 2026 liquidity answer. It is more likely a meaningful part of the years after that.
This is not a Havatzelet-only chart. That is exactly why it helps. It shows that Ram Aderet is telling a story of steadily building project surplus, but Havatzelet itself still sits relatively late in that curve. So anyone linking Series D to immediate Havatzelet cash release is skipping an important time layer.
What The Market May Miss
The real positive: Havatzelet no longer carries the mezzanine loan on its back. That removes an expensive financing layer and better aligns the project with its future surplus. The project also appears to be selling reasonably well, and the company is still showing an attractive expected gross profit.
What can mislead: the bond did not open the whole cash box. Half of the proceeds still depends on a full permit, the land facility was extended through June 30, 2026, and the project surplus itself is still described as a 2027 to 2029 event. So the distance between “there is surplus” and “there is cash” remains meaningful.
The between-the-lines signal: for the company, Havatzelet has become a financing asset. The project surplus is now pledged to Series D bondholders, and the deed turns the permit into the key that unlocks not only planning progress but also the second half of the financing proceeds. So Havatzelet is still not the project that eases liquidity now. It is the project that can support the capital structure later, if it clears the next gates on time.
Conclusion
Current thesis: Havatzelet released financing pressure in March 2026, but it did not yet release free cash.
That distinction matters. Series D removed the mezzanine, but it did not shorten the road to the surplus itself. Based on what can be verified from the local evidence, the next cash event that can still open is the second half of the Series D proceeds, and even that depends on a full building permit. After that, the company still has to deal with the land-facility bridge through June 30, 2026, and later with the actual surplus-release mechanics inside the project financing.
The strongest counter-thesis is that the market may be overstating the complexity: the full permit could still arrive soon, the second half of the proceeds could be released quickly, and the mezzanine repayment may already improve the project enough for the June 2026 land-facility extension to prove just a short bridge rather than a real problem. That is a legitimate view. It is still a view about what happens next, not about what has already happened.
So the right question at Havatzelet after Series D is no longer only how much surplus sits in the project. It is when that surplus actually becomes accessible, and after which financing layers and conditions. In Ram Aderet’s 2026 story, that is the difference between an improving financing setup and cash that has already been released.
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