Demand in a bond offering by the Israel Aerospace Industries passed NIS 60 billion today.
The IAI sought to raise a billion shekels in dollar-denominated bonds bearing Libor + 0.9%.
The bonds lock in today's dollar-shekel exchange rate as the minimum. If the dollar appreciates against the shekel, investors will benefit, but they won't be hurt if it falls, hence the bonds' popularity among institutional investors.
The extraordinary demand is all the more noteworthy because bidders were prohibited from placing orders bigger than the scope of the offering, meaning each could bid for a billion shekels worth at most.
Maoz Chen, manager of Africa Israel Mutual Funds, said the paper is ideal for bond funds because of the flow of interest combined with the risk-free investment in dollars.
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