$1.5b Israeli Treasury bonds vastly oversubscribed

Michal Abadi-Boiangiu

Accountant General Michal Abadi-Boiangiu issued $1 billion in 10-year bonds and $500 million in 30-year bonds.

Ministry of Finance Accountant General Michal Abadi-Boiangiu today completed in Tel Aviv a successful issue of dollar bonds for the Israeli government. Two bond series were issued: $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 US 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.

Abadi-Boiangiu, Yaheli Rotenberg (her deputy), and Ministry of Finance Debt Management Unit director Gil Cohen managed the bond issue. 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.

The issue was held following a long series of meetings in recent months between Accountant General Department staff and foreign investors in the US, Europe, and Asia. The impressive demand was also facilitated by the large number of investors who took part in the offering. Demand was forthcoming from over 200 different investors from 30 countries, including the US, the UK, Germany, France, Switzerland, and China. Demand was strong among Asian investment institutions, among others.

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."

Abadi-Boiangiu said, "The bond issue, which was conducted from Israel for the first time, provides maximum flexibility in timing the issue, according to the optimal conditions prevailing in the global markets. Extending the existing bond series, which took place as part of this issue for the first time, extends the government debt and increases the bonds' liquidity."

Published by Globes [online], Israel business news - www.globes-online.com - on March 10, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

Michal Abadi-Boiangiu
Michal Abadi-Boiangiu
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