Israel raises additional $5b debt on Asian markets

Rony Hizkiyahu  / Photo: Finance Ministry

The 40-year US dollar denominated bond was the first-ever raised by Israel on Asian markets.

Israel's Ministry of Finance, led by Accountant General Rony Hizkiyahu, yesterday completed raising a $5 billion Israel government bond on Asian markets. The US dollar denominated bond was the first-ever public issue by Israel on these markets, with the cost of raising the debt relatively low compared with previous dollar denominated bonds raised by the Israeli government. The 40-year bond was raised at a relatively low 3.8% annual interest.

This follows the raising of bonds worth $5 billion at the end of last month, which included three series of bonds: $2 billion over 10 years at 2.75% annual interest; $2 billion over 30 years at 3.875% annual interest; and $1 billion over 100 years at 4.5% annual interest.

The Ministry of Finance said, "Due to the expected rise in the government deficit as a result of the coronavirus in Israel, the Accountant General decided earlier today to execute a State of Israel bond issue on the international markets. The decision to execute the issue was taken after recent extensive consultations, which indicated growing demand by Asian investors for a State of Israel bond."

The Ministry of Finance added that demand for the bond was oversubscribed and totaled more than $10 billion. "This high demand was from many quality institutional investors and testifies to the major confidence in the Israeli economy, especially at a time of international crisis."

Deutsche Bank, Bank of America Securities Merrill Lynch and Goldman Sachs acted as underwriters for the issue.

Hizkiyahu said, "The bond issue targeting Asian investors for the first time in the history of the State, for a 40-year period, testifies to the confidence of large and quality investors around the world in the soundness of the Israeli economy, especially as the country copes with the coronavirus crisis. The issue bears witness to the financial strength of the country and its established support in international markets. The issue will be an important instrument in financing the government's activities in the near future."

Deputy Accountant General and Debt Unit Director Gil Cohen who conducted the bond issue said, "The ability of the State of Israel to carry out large issues generally on international capital markets is expressed by the long-term strategy of diversifying and expanding the investor base. Due to the high volatility on financial markets, the success of the issue was the direct result of the strength of the economy and the ongoing connection with investors worldwide in recent years. The issue indicates the possibility of the range of financing for the State and its ability to finance activities."

Published by Globes, Israel business news - www.globes-online.com - on April 30, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Rony Hizkiyahu  / Photo: Finance Ministry
Rony Hizkiyahu / Photo: Finance Ministry
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