November 25, 1996

Following is a report from "Ha’aretz" of November 25, 1996. Headlined: "Israel has mobilized $216-million through a Consortium of Foreign Banks." * * * *

The State of Israel yesterday successfully completed the raising of 1.1-billion French francs (or $216-million) through a Consortium of foreign banks.

It will be recalled that a group of five banks, headed by the Bank Hapoalim, undertook at the beginning of September to raise a loan for Israel through a banking syndicate, in the sum of $200-million (the equivalent of 1.1-billion French francs) for a period of seven years, with five years’ "grace" at very low interest rates of 0.25 percent above the "Libor" (London Inter-Bank Overnight Rates) for the first five years, and 0.3 percent over the "Libor" for the sixth and seventh years.

The banks joining the deal wanted to provide more than the required $200-million, the sum established by the Accountant General in the Finance Ministry. He responded partially to their request and increased the amount by 100-million francs, or $16-million.

Twenty-one banks took part in the syndicate, from France, Germany, Italy, Austria, Japan, the U.S., Britain and for the first time the Bank of Singapore. The loan is for a longer period than ever made available from banks of this kind.

In the Finance Ministry, it was reported that the Accountant General, Shai Talmon, and his deputy, Avi Elkind, will sign the agreement in London tomorrow with the agents of the 21 banks participating in the syndicate.

Talmon said the results of the capital-mobilization were greeted with satisfaction and added that, despite the low cost of the loan, a significant group of banks, some of them among the largest in the world, according to Talmon, was successfully formed, representing an expression of confidence in the Israeli economy’s international financial standing.

Elkind said the currency selected for the loan is the French franc, in the framework of an attempt to variegate the "basket" of commitments of the State, so that it will be less exposed to possible movements in the exchange rates of various currencies.