Ministry of Finance Accountant General Rony Hizkiyahu decided to today on the execution of a private placement with a European financial institution amounting to €500 million for 50 years. This is longest term debt the State of Israel has ever raised. Up to now, debt has been raised for periods of up to 30 years. The placement was at a fixed annual euro interest rate of 2%, which represents a low cost in comparison with previous long-term sovereign debt-raising.
The Ministry of Finance announced that the State of Israel's credit rating had led to high demand on the part of quality investors for its debt. In January, the state carried out a €2.5 billion public offering. The investor in the current offering is one of the largest pension funds in Europe. It has not previously invested in Israeli government bonds.
Deutsche Bank and Barclays served as underwriters for the placement.
Minister of Finance Moshe Kahlon said, "The test of the strength of the Israeli economy is the faith in it on the part of global investors and financial institutions. This placement is a vote of confidence in Israel and in the Israeli economy, but more than that, it expresses the world's confidence that the State of Israel is here to stay."
"The growing demand from leading investors around the world for Israeli long-term debt issues signifies the great confidence that exists in the Israeli economy and the ready access that Israel has to international markets," Hizkiyahu said. "The placement for this period is part of the strategy of lengthening the duration of the state's debt, to give a low interest rate for the long term."
Published by Globes, Israel business news - en.globes.co.il - on June 27, 2019
© Copyright of Globes Publisher Itonut (1983) Ltd. 2019