Israel Sells Rare ‘Century Bonds’ to Aid Recovery From Coronavirus Outbreak

The sale came a day after the government said it would spend 80 billion shekels ($22.3 billion) to help the economy cope with the coronavirus outbreak

Reuters
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An electronic board displaying market data is seen at the entrance of the Tel Aviv Stock Exchange, in Tel Aviv, Israel January 29, 2017.
An electronic board displaying market data is seen at the entrance of the Tel Aviv Stock Exchange, in Tel Aviv, Israel January 29, 2017. Credit: \ BAZ RATNER/ REUTERS
Reuters

Israel sold $1 billion of 100-year bonds in international markets as part of a record $5 billion fundraising to finance government aid to help the economy cope with the coronavirus outbreak.

Israel joins a handful of countries such as Austria, Mexico and Argentina that have sold so-called century bonds.

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“The 100-year issue is a testament to the country’s financial strength and its solidification in international markets. The offering will be an important pillar in financing government activity in the near future,” said Finance Ministry Accountant General Rony Hizkiyahu.

The Finance Ministry said it sold the 100-year bond at a coupon of 4.5%. Israel also sold $2 billion of 10-year debt at a coupon of 2.75% and $2 billion of 30-year bonds at 3.875%, which Hizkiyahu said were relatively low rates for international debt offerings.

The sale came a day after the government said it would spend 80 billion shekels ($22.3 billion) to help the economy cope with the coronavirus outbreak.

Demand for the issues topped $25 billion, the ministry said. It noted that the sale attracted more than 400 different investors from 40 countries, including the United States, Germany and the United Kingdom, as well as strong demand from Asian institutional investors.

Deputy Accountant General Gil Cohen said the ability to conduct a successful sale during a period of high volatility in the markets reflected Israel’s economic strength and its relationships with investors around the world.

Barclays, BofA Securities, Citibank and Goldman Sachs underwrote the bond issue.

Israel in January raised $3 billion in foreign debt in a sale of 10- and 30-year bonds that attracted demand of some $20 billion from investors.

Standard & Poor’s rates Israel’s sovereign debt at AA-minus, while Moody’s Investors Service rates Israel at A1 and Fitch Ratings at A-plus.

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