A 10 year bond issue abroad totaling 1.5 billion Euros was finalized. The successful issue indicates that international financial markets are expressing great confidence in the Israeli economy.
(Communicated by the Ministry of Finance)
The Ministry of Finance Accountant General Department completed today a successful issue of Israeli government Euro bonds in London, with the lowest interest rates ever for an issue in Euros. A total of €1.5 billion worth of bonds were issued for a period of 10 years, with a yield of 2.932%.
The issue was managed by the Accountant General, Michal Abadi-Boiangiu and Senior Deputy Accountant General Yali Rothenberg, together with the Managing Director of Government Debt Gil Cohen and the Ministry of Finance representative in New York Sigalit Sayag, resulting in the successful closure of the transaction which was performed through underwriters at Barclays, Goldman Sachs and City Bank.
The issue took place after an extensive round of meetings in Europe this week between foreign investors and the Government Debt Management Department.
A high demand of about 5.7 times the original planned issue amount (the original scope of the planned issue was €1 billion, however, it was decided to expand this amount to €1.5 billion due to the demand) was received from 300 different investors located in some 30 countries, including the United Kingdom , Germany, France, Switzerland, Hong Kong and others. Many of the investors that had previously met with the representatives of the unit participated in the offering, which facilitated the impressive demand for the bond issue.
In accordance with the Government Debt Management Department work program, this is the fifth Euro bond issue of the State of Israel and it was characterized by the lowest funding cost ever paid by the State of Israel in a Euro bond issue and by historically low margins. The issue helps to create a foreign currency benchmark in global markets and assists Israeli companies with financing in Euros. The last foreign currency (Dollar) issue took place in January 2013.
Minister of Finance Yair Lapid: "The successful issue indicates that international financial markets are expressing great confidence in the Israeli economy. The large number of financial institutions requesting to participate in the issue suggests that there is no substitute for responsible management and fiscal discipline."
Accountant General Michal Abadi-Boiangiu added that "the issue of bonds in Euros for the first time in four years expresses the confidence of foreign investors in general, and in Europe in particular, in the medium and long-term repayment capability of the State of Israel. It also points to the country’s various financing options in different markets and currencies."