Israeli Officials Meet U.S. Bond Investors in Debt RoadshowDavid Wainer and Shoshanna Solomon
Israel’s Finance Ministry officials are meeting bond investors in the U.S. to gauge appetite for the country’s debt as the central bank calls to reduce the budget deficit.
“Non-deal road shows are taking place to enable access to markets,” the ministry said in an e-mailed answer to questions from Bloomberg News. The accountant general’s office is studying a “foreign issuance as part of its yearly work plan,” the ministry said. Israel sold $1.5 billion of 10-year bonds in January 2012, the country’s first overseas offering in three years. Israel is rated A1 at Moody’s Investors Service, the fifth highest investment grade.
The yield on the government’s 4 percent dollar-denominated bonds due June 2022 fell two basis points, or 0.02 percentage point, to 3 percent as of 11:53 a.m. in New York, according to data compiled by Bloomberg. The bonds handed investors a return of 13.3 percent since January last year, compared with a return of 4.5 percent in 2012 for the BofA Merrill Lynch Global Broad Market Sovereign Plus Index.
Bank of Israel Governor Stanley Fischer has been calling on the government to rein in the budget deficit, which he said will reach about 4.2 percent of economic output in 2012, more than double the original plan. Prime Minister Benjamin Netanyahu called for early elections, scheduled for Jan. 22, citing opposition from partners in the coalition government to his budget plan.
Globes reported in December that Israel is seeking to raise as much as $1.5 billion in foreign bonds in order to diversify funding sources. The cost of insuring Israel’s debt against default for five years dropped 63 basis points, or 0.63 percentage point, last year to 135, according to data compiled by Bloomberg.
Israeli economic growth slowed to 3.3 percent in 2012, the Central Bureau of Statistics said Dec. 31, compared with 4.6 percent in the previous year and 5 percent in 2010.