10 Jan 2019

Globes: Israel raises low-interest €2.5b bond in London

The Ministry of Finance said the bond had been issued with the lowest margins ever above the euro’s benchmark interest rate.

Israel’s Accountant General Rony Hizkiyahu has completed raising a €2.5 billion bond in London, of which €1.25 billion is to be repaid over 10 years and €1.25 billion is to be repaid over 30 years. The bond offering enjoyed record demand of €15 billion. Israel’s Ministry of Finance said that the bond had been issued with the lowest margins ever above the euro’s benchmark interest rate, reflecting investor confidence in Israel’s economy.

The 10-year bond is at a 1.5% interest rate and the 30-year bond is at 2.5%. The Ministry of Finance said that this was the first ever 30-year euro bond that it has issued and was one of the few such bonds ever issued for a country outside of Europe. The bonds were issued at margins of 1.15% and 0.75% basis points above the mid-swap benchmark interest rate for similar terms. The underwriters for the issue were Barclays, BNP Paribas and Goldman Sachs.

The bonds were issued after senior Ministry of Finance officials conducted a road show for foreign investors in London, Paris, Frankfurt and Munich.

The Ministry of Finance noted that demand was six times the amount of the bond issued enabling officials to extend the terms of the Israeli government’s debt which reducing risk and recycling. Some 300 investors participated in the bond issue, mostly banks and institutional investors from 30 countries including the UK, Germany and France.

Read more here: https://en.globes.co.il/en/article-israel-raises-25b-bond-in-london-1001268459