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Independence and a Bright Future

Jeremy SchwaeberArticles, Bonds, Government, News from Israel

As we celebrate our 72nd year of independence, we look back at the past and are optimistic about our future. With all the news hitting us at the moment on COVID-19, you may have missed some significant stories on Israel. Israel has issued 10-, 30- and for the first time, even 100-year bonds this week. While the purpose of this initiative is to shore up the government’s assistance plan for dealing with the coronavirus, it is clear that the world sees Israel’s future as bright and is coming along for the ride.

The offering has attracted over 400 different investors from 40 different countries, with strong demand from Asian institutional investors. The Ministry of Finance says Bank of America, Barclay’s Bank, Goldman Sachs and Citibank are underwriting the initiative. With $25 billion in demand, Israel decided to raise $5B at favorable rates. This isn’t surprising given that Israel has an AA- Stable credit rating from S&P, A1 Stable rating from Moody’s, an A+ rating from Fitch.

Israel’s Accountant General Roni Hezekiah said the oversubscription “indicates the confidence of the world’s largest investors in the Israeli economy, especially in view of the way the State is coping with the corona crisis. The 100-year IPO is a testament to the country’s financial strength and its establishment in international markets.”

Senior Deputy Accountant General Gil Cohen said: "The ability of the State of Israel to make the successful IPO at record speed and with the high volatility in financial markets is a direct result of [Israel’s] economic strength and the ongoing relationship with investors around the world in recent years.

In other COVID-19 Israel news, Israel was ranked the safest country during the coronavirus outbreak according to the Deep Knowledge Group website as highlighted by the Prime Minister’s Office. The country is currently coming out of a lockdown for all citizens, as already on April 2, 2020 new cases peaked and we’re seeing much fewer new cases in the past four weeks. Among the essential sectors that continued to function during the crisis is the capital market. We are already seeing a significant market recovery and have made appropriate moves to protect and grow our client’s investments.

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Sources: Israel Ministry of Finance, Calcalist, News1