On Independence Day this year, Israel completed a successful $5 billion government bond issue in Asian markets.
Israel’s first-ever public issue bond on Asian markets raised $5 billion, providing “a testament to the country’s financial strength and its consolidated support in international markets,” said Accountant General Ronnie Hezekiah. The issue will help finance government activity in the near future.
The bond covers a 40-year term at a low 3.8 percent annual interest and the launch followed a long-term strategic plan to expand and diversify the State of Israel’s investor base and financing options.
The issue saw high demand from some 300 high-quality investors from over 30 countries totaling over $10 billion, even though the offering was aimed primarily at Asian markets, where $5 billion was raised. In this move, Israel joined a limited number of countries that have issued bonds on this market
The step was taken in response to the projected rise in the government deficit as a result of the coronavirus (COVID-19) crisis, leading Hezekiah to seek issuance of the State of Israel’s bonds in international markets.
The banks that served as underwriters in the bond issue were Bank of America, Merrill Lynch, Deutsche Bank and Goldman Sachs.
Hezekiah stated that the successful round “targeting Asian investors for the first time in the history of the State, for a 40-year period, testifies to the confidence of the world’s largest and highest-quality investors in the robustness of the Israeli economy, especially in view of the country’s response to the corona crisis.”
Senior Deputy Accountant General Gil Cohen added that Israel’s ability 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,” he stated.
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