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Capital Markets

Israel sells $3 billion bond as regional tensions abate

Israel has taken orders of $20 billion for its first Eurobond of the year, despite the deadly strike on an Iranian general that threatened to push simmering Middle Eastern tensions to boiling point in early January.

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Just days after a deadly airstrike on Iranian general Qassem Soleimani shook the markets, Israel sold a $3 billion Eurobond to investors who say that, despite early fears of an imminent escalation, regional flare-ups are just an everyday part of investing in the region.

Israel, rated A1/AA-/A+, launched a $1 billion 10-year bond at 68 basis points over Treasuries and a $2 billion 15-year bond at 115bp over on January 8 with orders for the deal topping $20 billion, according to a lead manager.

The US killing of general Qassem Soleimani in Iraq on Friday January 3 marked what commentators said was the most serious flare-up in regional tensions in recent years. Iranian forces retaliated by firing missiles at US troops in Iraq on January 8.

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Koon Chow, UBP Asset Management

But despite an initial turn to safehaven assets that prompted gold and oil prices to spike, broader financial markets proved resilient, providing a supportive market for Israel to sell its Eurobond. 

The sovereign is a regular on the international markets and tends to print deals in January.


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