All that glitters, according to European investors, at least, isn’t Gold … stone.
On the very day the European Parliament endorsed the Goldstone report accusing Israel and Hamas of war crimes during the 2008-2009 Gaza war, European money managers were rushing to buy a nearly $2 million Israeli bond issue.
“These people are professionals and all of them were impressed with our economy,” said Zvi Chalamish, Israel’s consul and chief fiscal officer for the Ministry of Finance here.
The sale, which took place March 10-11 in London, was the first Israeli offering in Europe in nearly five years and its largest in the international markets. It attracted 400 investors from around the world, including Korea, China and Europe. They placed orders totaling about $13 billion, and Israel ended up selling nearly $2 million in10-year benchmark bonds at an interest rate of 4.625 percent.
“Our underwriters thought we would have to pay a higher price,” Chalamish said. “We paid considerably less because of the demand. … The moment we felt the market was comfortable with Israel, it was easier for us to find a lower price.”
The reason for the bond issue, he said, was to “help create a benchmark for companies in Israel that wish to raise money in Europe. When investors invest in companies, they want to know the risk of the country.”
“Our economy is excellent,” Chalamish said, adding that it grew 0.7 percent in 2009 while the economy in Europe declined 4.1 percent.
He added that in only three countries — Israel, Switzerland and Norway — is the ratio of debt to gross domestic product the same this year as it was before the economic crisis started at the end of 2007.