Jerusalem, 19 April 2000

Finance Ministry: Moody’s to Re-examine Israel’s Credit Rating

(Communicated by Finance Ministry Spokesman)

The Ministry of Finance yesterday (Tuesday) 18.4.2000, reports that Moody’s Investors Service has announced its decision to re-evaluate the credit rating of the State of Israel with the possible intention of raising it from A-+ to A within the coming weeks. Moody’s will also re-evaluate Israel’s short and long-term credit rating for Shekel and foreign currency debt.

Moody’s currently gives Israel an A3 credit rating regarding foreign currency debt (equivalent to Standard and Poor’s A- rating), and A2 regarding it Shekel debt (equivalent to A). The decision to re-evaluate follows improvements in forecasts for medium- and long-term economic development and the expectation that the affect of geo-political conditions on the Israeli economy will lessen and therefore will have a limited effect on Israel’s credit rating.

Moody’s representatives will visit Israel soon in order to receive updates on the economic situation, with a focus on the public sector, the pension system and labor market, after which they will submit their recommendations regarding the possible change in Israel’s credit rating.

Finance Minister Avraham Shohat expressed satisfaction with the announcement, stating that it reflects positive developments in the Israeli economy and the international community’s trust in the economy’s functioning. Accountant-General Nir Gilad stated that raising Israel’s credit rating will contribute to the government’s ability to raise capital in international markets, reduce the cost of capital and position Israel in a worthy place among the world’s developed economy’s.