(photo credit: .)
Israel will meet with European investors this week as the country seeks
to sell euro-denominated bonds for the first time in more than four
years, Accountant-General Shuki Oren said.
The government hired
Barclays Capital, Goldman Sachs Group and Morgan Stanley for the sale,
the Finance Ministry said in an e-mailed statement. Oren will meet with
European investors starting Wednesday, a banker involved in the
“Israel will seek a benchmark offering of at
least €1 billion, but I expect the book to be very strong and the
offering to be even bigger,” Eyal Klein, a former Finance Ministry
director for external debt and chief strategist at Israel Brokerage
& Investments, said. “This is going to happen sometime this week.”
Israel last sold bonds in euros in October 2005, raising €750 million.
the country’s latest issuance abroad, a $1.5b. offering of 10-year
dollar-denominated bonds a year ago, was priced to yield 262.5 basis
points more than Treasuries of similar maturity. Oren told Bloomberg in
an interview on November 2 the next sale would be in euros to diversify
the country’s currency exposure.
The euro-bonds sale might help
Israeli companies raise money abroad, Finance Minister Yuval Steinitz
said in an interview Monday after addressing a Knesset committee.
the timing and amount of the bond issuance would depend on market
conditions, the country’s economic standing is strong, he said.
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see importance in this not only in raising money to cover the deficit,
but I see added value in it,” Steinitz said. “When Israeli government
bonds are traded on Wall Street or in Europe, this gives a boost to
investments in Israel and to issuances of Israeli corporations that are
raising money in the same markets.”
Israel’s gross domestic
product grew an annualized 4.4 percent in the fourth quarter after
expanding 3% in the previous three months. Bank of Israel Governor
Stanley Fischer raised the benchmark interest rate at the end of
December by a quarter-point to 1.25%, his third increase since the
economic recovery began.
“I expect huge demand and pricing that
will match the solid standing of Israel’s economy,” Klein said. The
country’s growth rate is among the highest in the Western world, he
The pricing for the bonds will probably be more than 100 basis points lower than Greece’s last issuance, Klein said.
sold 10-year bonds last Thursday after Prime Minister George Papandreou
promised to reduce Europe’s largest budget deficit by cutting wages.
The government priced the notes at 300 basis points more than the
mid-swap rate, or a yield of 6.35%.
Israel’s debt is rated A1, the fifth-highest investment-grade status,
at Moody’s Investors Service. Greece is rated one step lower at A2 by
The price on Israel’s Eurobond due in 2015 was little
changed on Monday, yielding 3.37% by 4:07 p.m. in Tel Aviv, according
to Bloomberg Bondtrader composite prices. That compares with a yield of
3.29% at the start of December.
The price on Israel’s dollar bond due in 2019 fell $0.13 to $103.06, pushing the yield up two basis points to 4.71%.
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