Strong Demand for Israel’s First 2025 Debt Sale
Israel successfully raised $5 billion through a dollar-denominated bond sale in international markets, a move aimed at reducing its budget deficit and financing the costs of its ongoing war. The issuance, led by the Finance Ministry, saw robust demand from investors, signaling confidence in the country’s financial stability despite geopolitical challenges.
Details of the Bond Issuance
The Finance Ministry introduced two new series of government bonds:
- 5-year bonds: Priced at a spread of 120 basis points above the U.S. Treasury yield.
- 10-year bonds: Priced at 135 basis points above comparable U.S. bonds.
The issuance received overwhelming interest, with demand topping $23 billion, nearly 4.6 times the amount sold.
Global Investors Show Confidence
Israel’s bond sale attracted 300 institutional investors from over 30 countries. Participants included:
- Pension funds
- Insurance companies
- Hedge funds
- Financial institutions holding long-term Israeli government bonds
Officials from the Israeli Finance Ministry met with investors in the United Kingdom and the United States ahead of the bond sale, bolstering investor confidence following a recent ceasefire agreement with Hamas in Gaza.
Finance Ministry Highlights Economic Stability
Yali Rothenberg, Israel’s Finance Ministry Accountant General, emphasized that the successful bond issuance reflects international trust in Israel’s economy. “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,” Rothenberg said.
He added that the pricing of the bonds demonstrates a “significant decrease in Israel’s risk premium”—an indicator of reduced financial risk perceived by global markets.
Leading Banks Manage the Issuance
The bond sale was managed by a group of top-tier global banks, including:
- Bank of America
- Citi Bank
- Deutsche Bank
- Goldman Sachs
- JP Morgan
Final Thoughts
Despite ongoing security and geopolitical challenges, Israel’s latest bond sale underscores strong investor confidence in its economy. With global institutional investors backing the issuance and the Finance Ministry maintaining proactive engagement with financial markets, Israel continues to secure funding for its defense and economic stability.
