After the staggering success, Israel had with the recent bond offering in the US, now it’s time to try and raise some money in Europe. According to Globes: “Accountant General Shuki Oren told “Globes” that the government’s next bond offering will be held in Europe, not the US, and will be denominated in euros. The turn to Europe comes after last week’s offering of 10-year notes in the US raised $1.5 billion at 5.2%, an especially low rate, and triple the originally intended amount. The original goal of $500 million was increased when demand for the issue proved to be much higher, reaching $12 billion.”

The success of the US offering certainly is a thumbs up from the investing public as to the state of the Israeli economy.

Share with others:

After initially trying to raise $500 million in a note offering, the Israeli Ministry of Finance is overjoyed at the fact that they are going to raise almost $8 billion. Giddy up!

According to Globes: “Capital market sources tell “Globes” that there is very strong demand for the Ministry of Finance’s 10 year dollar-denominated notes offering. Sources say demand surpassed $12 billion, and the issue was closed to new offers. Earlier reports had demand rising past $6 billion to reach $8 billion. The Ministry of Finance had planned to offer $500 million worth of notes today in New York. In light of the strong demand, market expectations are for Israel to sell $1.5 billion of the note.”

It appears that notes will price at a yield of 2.875% above the yield to maturity on 10 year US Treasury Notes. T-notes with that maturity closed yesterday at a yield of 3%, so that Israel’s notes will yield 5.875% per year.

Share with others:

With Israel’s ongoing struggle to rid itself of terrorist enemies comes the potential for less sympathetic countries to effectively set up an Israeli boycott. The government of Norway, has been  reviewing their holdings in Israeli government bonds as well as those by Israel Electric corp.

Norway has been outspoken in their criticism of the Israeli ‘occupation’ of Palestinian lands. Funny that when money is at stake, the ‘occupation’ seems less important. According to a report in the Jpost.com: ” Norway will keep its holdings in Israeli bonds as the ethics council for the country’s Oil Fund investigates investments in Israel, E24 reported, citing Finance Minister Kristin Halvorsen. A decision to sell government bonds would in reality entail a boycott of Israel, which isn’t government policy, Halvorsen told news agency NTB, according E24.”

Looks like Norway is one country that Iran can cross off the ‘boycott Israel’ list.

Share with others:

Will current Bank of Israel head Stanley Fischer be leaving Israel for the New York Fed? According to a report in the Wall Street Journal, Fischer is considered to be a dark horse to fill the vacancy left by Timothy Geithner, who is joining Pres. elect Barack Obama as Treasury Secretary.

According to the Journal, “Outsiders who could be considered include Peter Fisher, a former Treasury official who is now a senior executive at BlackRock Inc.; Stanley Fischer, an economist who runs Israel’s central bank; and Roger Ferguson, a former deputy Fed chairman who is now chief executive of TIAA-CREF, an investment firm that specializes in serving academic institutions.”

The question is whether if this is so, does this mean the Israeli economy is about to go into the gutter. Fischer has a history of bailing out just in the nick of time, before disaster strikes. Just look at where he was before he came to Israel. He was a hot shot at Citigroup (C), Vice Chairman. I may be wrong but I think that he was involved with risk management. Funny that he left in 2005. Humm.. Think he may have known a thing or two about what ‘toxic’ things were on their balance sheet?????

Just today the ‘09 growth estimates fro Israel were slashed again. This must make 3-4 times in the last month. That doesn’t look all that promising to me.

To be fair, Fischer’s name always seems to pop up when there are top level economic vacancies to fill, so I wouldn’t be jumping to any conclusions just yet.

Please see our Disclaimer HERE.

Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.

Share with others: