Accountant General Rony Hizkiyahu completed a $2 billion bond issue in London yesterday. Of this, $1 billion is for ten years and $1 billion for 30 years. Demand for the bonds was $18 billion.
The bonds were issued at a minimal margin over the interest rate on equivalent US government debt, indicating investors' confidence in the Israeli economy.
The 10-year coupon is 3.25%, and the 30-year coupon is 4.125%. The bonds were issued at margins of 75 and 125 basis points over the interest rates on US government notes for similar periods.
The high demand for the bonds from major strategic investors supported the issue of the 10-year benchmark issue and the 30-year series, part of the Accountant General's policy of lengthening Israel's government.
300 different investors from 35 countries took part in the issue. Among other places, the investors were from the US, Britain, Germany and France, and there was also lively interest from Asian financial institutions.
"The success of the issue, as seen in the high demand and the low margins, is a direct result of the strength of the Israeli economy and professional management of government debt in recent years," Hizkiyahu said. "The fact that the State of Israel issues new bonds for periods of ten and thirty years in substantial amounts denominated in dollars is an indication of the wide range of financing possibilities available to the state in the global financial markets."
Published by Globes [online], Israel business news - www.globes-online.com - on January 11, 2018
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