$1.5 Billion Israel Bond Issue Completed


Two Israel government bond issues with a combined worth of $1.5 billion were completed on Thursday, and were hailed by officials as a vote of confidence in the state.

Ministry of Finance Accountant General Michal Abadi-Boiangiu handled the issues: $1 billion of 10-year bonds with a 2.942% return, reflecting a spread of 105 base points above the interest rate on 10-year U.S. government bonds, and $500 million of 30-year bonds with a return of 4.181%, reflecting a spread of 150 base points above the interest rate on 30-year US government bonds.

The issue, conducted through underwriters Barclays’, Goldman Sachs, and Citibank, was successfully closed.

Demand for the bonds totaled $8.3 billion, more than five times the amount issued.

Strong demand from large strategic investors made it possible to extend the existing series to 30 years, thereby supporting the Account General Department’s policy of extending government debt and substantially reducing the refinancing risks.

Over 200 different investors from 30 countries expressed demand for the bonds, including the United States, the U.K., Germany, France, Switzerland, and China.

This was Israel’s 11th dollar bond issue, and will be a benchmark for pricing the risk in the Israeli economy, in accordance with the Accountant General Department’s work plan aimed at generating a benchmark in foreign currency on the global markets. The cost of issuing the 10-year bonds was the lowest Israel has ever paid for dollar bonds. The most recent previous dollar bond issue was in January 2013.

Minister of Finance Moshe Kahlon said, “The successful issue shows the great trust in the Israeli economy throughout the world. I thank the Accountant General and her assistants for their efforts and the impressive results they achieved.”