Sources inform ''Globes'' that Accountant General Shuki Oren has postponed a pending ten-year note offering planned in Israeli and foreign markets planned for Friday. On Monday, his staff will review the market conditions for the offering. If the conditions are poor, they will again postpone the offering.
Ministry of Finance sources said that Oren reviews the market climate on a near daily basis. One source said, "Israel doesn’t need cash urgently; I stress the word 'urgently'."
The question is what market conditions the Ministry of Finance waiting for. Oren wants an interest rate of 5.5-6% on ten-year notess, and he will reportedly reject the offering if the proposed interest rate is higher. Ten-year US government notes currently bear 3% interest, a very good rate since 3% inflation over the next decade is considered a reasonable assumption.
The sources added that the Ministry of Finance plans to raised $1.5 billion, provided the market conditions are favorable, and not less than $750 million. Oren will reportedly reject any offering for less than this amount. The ministry is not expected to use US loan guarantees for this offering.
Belying media reports, Citigroup, Goldman Sachs, and Deutsche Bank will handle the offering, and JPMorgan Chase & Co. will not participate.
Published by Globes [online], Israel business news - www.globes-online.com - on February 26, 2009
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