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Israel 2023 Yield Drops as Obama Seeks Congress Nod on Syria

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Sept. 1 (Bloomberg) -- Israel’s benchmark government bonds rose, pushing the yield down to a one-week low, after U.S. President Barack Obama slowed his march toward ordering a military strike against Syria for using chemical weapons.

The yield on the benchmark 4.25 percent notes due March 2023 declined four basis points, or 0.04 percentage point, to 3.97 percent at the close in Tel Aviv. The yield jumped 26 basis points last month, the biggest increase since the notes started trading in August 2012. The shekel appreciated 1 percent to 3.6213 a dollar in the three days to Aug. 30.

Obama yesterday called on Congress to approve a military operation “limited in duration and scope” to punish the Syrian government and to reinforce an international norm against such “heinous” acts. Congressional leaders have agreed to take up the issue once lawmakers return from their recess on Sept. 9.

“The delay in the threat of an attack on Syria that will be small in scale according to yesterday’s speech by Obama is bringing back some buyers after yields soared in the last few weeks,” said Yshai Shilo, a fixed-income broker at Tel Aviv-based I.B.I.-Israel Brokerage & Investments.

Prime Minister Benjamin Netanyahu said at today’s weekly cabinet meeting Israel is “prepared for any eventuality,” according to a text message from his office. The country, which shares a border with Syria to its north, bolstered air defenses in the northern part of the country and called up reserves in air force, intelligence and home front units.

Five-year credit-default swaps, or the cost of insuring government debt over the period, rose one basis point to 141 on Aug. 30, the highest since June 24, according to data provider CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the privately negotiated market.

The shekel appreciated 3.1 percent this year, the best performer among a list of 31 major currencies tracked by Bloomberg.

To contact the reporter on this story: Sharon Wrobel in Tel Aviv at swrobel4@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

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