Israel has joined an exclusive financial club – issuing a bond series that will be redeemable in 50 years. The bonds, worth 500 million euros, are being issued for a large European pension fund. The bonds may be traded on markets, and bear a 2% annual interest rate in euros for the 50-year period.
The underwriters for the bonds are Deutsche Bank and Barclays. The banks will hold the bonds on behalf of the purchasers and make a market for selling them, if the client desires. According to the Finance Ministry, Israel has issued over 2.5 billion euros worth of bonds since the beginning of the year. Most of the bonds were issued for 30 years. According to the Ministry, 50-year bond issues are rare and are usually issued only by the world’s largest economies, and the fact that Israel successfully issued such a series indicates the faith customers have in the country’s future.
Finance Minister Moshe Kahlon said that “Israel’s economic strength is built on the faith of investors and the trust international economic institutions have in it. This bond issue shows that faith, but even beyond that, it shows the faith that the world has that Israel is here to stay.”