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Large Asian Investor Snaps Up $400 Million in Govt. Bonds

The government on Tuesday said that it had sold $400 million worth of bonds to one of the largest sovereign funds in Asia.
By David Lev
First Publish: 7/5/2011, 10:46 PM / Last Update: 7/6/2011, 5:10 AM

Flash 90

The government on Tuesday said that it had sold $400 million worth of bonds to one of the largest sovereign funds in Asia. It did not name the government that made the purchase, but industry insiders noted that China's sovereign investment fund, CIC, and Singapore's sovereign investment fund, Temasek, were among the largest sovereign funds in Asia.

The bonds were sold with a one-year term and were underwritten by Goldman-Sachs. The bond bears a nominal interest rate of 1.599%, but Treasury officials said that it will cost the government less, as the shekel financing cost for the same period is lower by about 0.3%. In any event, officials said, the financing rate is considered very low.

The bonds were issued at the request of the Asian fund as part of Government’s European Medium Term Note shelf prospectus plan, which is open to all investors. In a statement, the Treasury said that the investment is the fund's first in Israel, and that they are considered “a strategic global investor in capital markets.”

Officials said that this was the third large offering to Asian investors in the past year and a half, with the most recent issue in March 2011. The officials said they were continuing to seek out similar investments, which will “significantly reduce the cost of raising money for the government.”