Israel Returns to Global Bond Market Amidst Conflict Subside
Jerusalem, Feb. 28, 2025: Israel has re-entered the global bond market, offering five- and 10-year tranches with respective spread guidance of approximately 150 basis points (bps) over US Treasuries and 165 bps. The final pricing and size are expected to be determined later today, with each tranche anticipated to exceed $500 million.
This issuance marks Israel's first dollar bond sale in over 16 months, since its March 2024 transaction of $8 billion. The country's fiscal deficit has expanded considerably since the onset of a multi-front conflict against Iranian-backed militias in October 2023.
However, recent ceasefires with Hezbollah and Hamas have eased the economic impact of the war. In January, Israel's 12-month trailing budget deficit declined to 5.8% of GDP from 6.9% in December, according to the finance ministry.
Concurrently, Israel's bond spreads and credit-default swaps have narrowed, indicating improved investor sentiment. The Israeli shekel has also appreciated against the US dollar.
Bank of America Merrill Lynch, Citigroup, Deutsche Bank, Goldman Sachs, and JPMorgan Chase are managing the bond sale.