Tuesday, January 24, 2012

Bethel Finance: The Ministry of Finance in Israel to Raise $1b in US

Bethel Finance news:
The Ministry of Finance plans to issue 10-year dollar bonds in the US, depending on market conditions, the ministry announced today. Accountant General Michal Abadi-Boiangiu is currently in the US with her deputy, Eran Heimar. The ministry reportedly plans to raise $1 billion today.

Ministry of Finance tax revenues and budget deficit figures for 2011 show that deficit exceeded the target by 0.4 percentage points. The ministry also expects the 2012 deficit to exceed the target, and the government apparently wants to raise capital to balance the budget.

The budget deficit totaled NIS 28.6 billion in 2011, 3.3% of GDP, compared with a deficit target of NIS 25.2 billion, or 2.9% of GDP.

Israeli government shekel bonds are currently traded at a yield of 4.53%, so the success of today’s offering will partly depend on the spread between the bonds’ interest rate and the benchmark in Israel.

This is the first time that Israel is marketing dollar-denominated bonds since March 2009, when it raised $1.5 billion. The previous international issue was in euros, when Israel raised euro1.5 billion in March 2010.

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