Israel sells USD 5 billion in bonds to manage budget deficit, finance its war: Report

Jerusalem, February 12 (PTI) Israel has sold 5 billion in dollar-denominated government bonds in international markets to bring down its budget deficit and finance the costs of the war in what is being seen as a strong demonstration of faith in its economic stability, local media reported.

In the first debt sale of 2025, the Finance Ministry offered two new series of 5-year and 10-year government bonds. Demand for the debt issuance topped USD 23 billion, or 4.6 times the amount sold, The Times of Israel (TOI) reported.

The two notes were priced at a spread of 120 and 135 basis points, respectively, above the US government bond yield for a similar period, the report said.

“This is an important public issuance that is a testament to the financial stability of the State of Israel and the high confidence of global investors in the Israeli economy, even in a time the country faces global, security-related and local challenges,” Finance Ministry Accountant, General Yali Rothenberg, was quoted by TOI as saying.

“The spreads in the debt issuance reflect the significant decrease in Israel’s risk premium,” Rothenberg asserted.

Israel has been fighting a war with the Hamas militants in Palestine on the one hand and Hezbollah in Lebanon on the other hand since October 2023.

The sale is said to have attracted 300 investors from over 30 countries, including large institutional investors such as pension funds, insurance companies, hedge funds, financial investors and entities that hold long-term government bonds of the State of Israel.

As per the report, Israeli Finance Ministry officials met investors in the UK and US ahead of the bond sale, as the first stage of a ceasefire agreement with Hamas in Gaza was sealed last month.

Bookrunners of the issuance were Bank of America, Citi Bank, Deutsche Bank, Goldman Sachs, and JP Morgan, it said. PTI HM NPK NPK

Source: PTI