Israeli gov't completes largest-ever bond issue

Rony Hizkiyahu  / Photo: Finance Ministry

The $5 billion debt raised by Israel was five-times oversubscribed and will help pay for the NIS 80 billion economic aid package.

Israel's Ministry of Finance, led by Accountant General Rony Hizkiyahu, yesterday completed raising $5 billion in three series of bonds on international markets. The debt was successfully raised despite the coronavirus caused economic crisis and the very large scale sale of Israeli government bonds by foreign investors two weeks ago. The bond issue included Israel's first ever 100-year bond on which it will pay annual interest rates of 4.5%.

The Ministry of Finance stressed that the debt has been raised at relatively low cost for dollar denominated government bonds, with rates only slightly higher than in January before the crisis, when rates were at all-time lows. There were 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 stressed that the timing and scale of the bonds was determined after the government announced its NIS 80 billion financial rescue package on Monday evening to cope with the coronavirus economic crisis. $40 billion is being raised on the Tel Aviv Stock Exchange and $40 billion on international markets.

The bonds were five times oversubscribed with demand of more than $25 billion. 400 investors from 40 different countries took part in the offering.

Bank of America Securities, Barclays Bank, Goldman Sachs, and Citibank acted as underwriters for the issue.

Hizkiyahu said, "The largest ever bond issue in the history of the State demonstrated the confidence among large and quality investors worldwide in the strength of Israel's economy, especially as the country copes with the coronavirus crisis."

Published by Globes, Israel business news - en.globes.co.il - on April 1, 2020

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

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