Despite the significant credit rating downgrade of Israel last weekend, the country successfully completed a large-scale issuance of government bonds. The issuance, carried out by the Accountant General’s Department of the Ministry of Finance on Monday, raised NIS 3.85 billion in the local market, with most of the funds earmarked to finance ongoing war expenditures.
The demand for the issuance was particularly impressive, reaching 3.3 times the total offering, or more than NIS 12 billion. This high level of demand, which exceeded expectations, reflects investor confidence in Israel’s economic resilience despite the current challenges and the dual downgrade by the international rating agency Moody’s.
The issuance, part of a regular series of weekly bond offerings, included a variety of bonds: three fixed-rate shekel-denominated series, two inflation-linked series, and one short-term series. This diversity allows investors to choose investment channels that suit their needs and preferences.
All primary market makers participated in the issuance, including leading financial institutions from Israel and abroad. Participants included top Israeli banks such as Bank Leumi, Bank Hapoalim, Discount Bank, Mizrahi-Tefahot Bank, and the International Bank, alongside top international banks such as Citibank, Barclays, Goldman Sachs, Merrill Lynch, JPMorgan, BNP Paribas, and Deutsche Bank. The broad participation of both local and foreign financial institutions underscores the widespread confidence in Israel’s economy and the government’s financial policies.
In response to the successful issuance, officials from the Accountant General’s Department at the Ministry of Finance stated that the results reflect Israel’s ongoing ability to raise capital on favorable terms, even in challenging times. They emphasized that the Accountant General maintains high access to both local and international capital markets and is prepared to provide financial solutions for government needs during crises using a variety of financial tools.
“The ability to raise debt and finance government activities, even in times of emergency, on such a large scale demonstrates the market’s confidence in the State of Israel,” noted officials from the Accountant General’s Department. The success of the issuance highlights Israel’s economic resilience and the investors’ trust in the country’s financial stability, even in complex times.
The success of the issuance comes at a crucial time, as Israel faces significant security and economic challenges. The ability to raise substantial amounts in competitive market conditions provides the government with the necessary resources to continue funding the war effort and support the local economy during this period.
