Israel Raises $1.5 Billion in Dollar-denominated Bond Issue

Finance Ministry says Israel sold $1 billion in a new benchmark 10-year bond and another $500 million by expanding an existing 30-year series.

Israeli Finance Minister Moshe Kahlon briefing reporters at the Knesset on Monday.
Lior Mizrahi

Israel raised $1.5 billion in a dollar-denominated bond issue late on Wednesday in its first such debt offering in three years.

The Finance Ministry said Israel sold $1 billion in a new benchmark 10-year bond, and another $500 million through a follow-on offering of its last dollar issue in 2013 for a term of 30 years. Over 200 investors from 30 countries placed a combined $8.3 billion in orders for the bonds.

“The successful issue testifies to the immense confidence the Israeli economy commands in the world,” Finance Minister Moshe Kahlon said.

The 10-year bond was sold at 2.942%, or 105 basis points over the comparable United States 10-year Treasury note, the lowest ever paid by the Israeli government on a dollar offering, the ministry said. The 30-year bond sold at 4.181%, or 150 points over comparable U.S. Treasuries.

Another first for the issue is that the sale was managed from Tel Aviv, rather than from New York or London as in Israel’s 10 previous overseas bond issues, the treasury said. Israel is rated A1 by Moody’s Investors Service, A+ by Standard & Poor’s and A by Fitch Ratings, all with a stable outlook. Barclays Capital, Goldman Sachs and Citi were the underwriters for the bonds.