Israel seeks to finance its war on Gaza with a new budget in which the deficit expands (Al Jazeera)
Israel raised $8 billion from the sale of international bonds, in the first issuance in public markets since the outbreak of the war on the Gaza Strip, and it is also the largest dollar issuance ever for Israel.
3 deadlines
The Israeli government issued bonds:
Worth $2 billion due within 5 years.
Another worth $3 billion is due within 10 years.
A third, worth $3 billion, is due within 30 years, according to Bloomberg, citing informed sources that it did not name because it was not authorized to speak on this matter.
Israel's bond issuance comes at a time when it is looking to continue the war on the Gaza Strip.
“Israel has significant financing needs this year due to the war,” said Uday Patnaik, head of emerging markets fixed income at Legal & General Investment Management. “I would not be surprised if they need to issue more.”
The war led to turmoil in the Israeli economy, after a major shock in the first few weeks of the war.
Israel's war on the Gaza Strip left 30,717 Palestinian martyrs and more than 70,000 injured.
Existing anxiety
According to Bloomberg, the credit default swap (the cost of protecting against default) remains high, among other places in the Israeli economy where there is concern due to the war.
Moody's lowered Israel's rating by one level to "A2" last February, the first downgrade ever for the occupying state.
Late last month, the British Financial Times newspaper quoted the Accountant General in the Israeli Ministry of Finance, Yali Rotenberg, as saying that Israel plans to borrow $60 billion this year, freeze government employment and increase taxes, after its military spending nearly doubled as a result of its war on the Gaza Strip.
The economy contracted by 19.4% annually in the last quarter of last year, reflecting the losses of the war, ending 2023 with growth of 2%.
Source: Bloomberg