U.S. Investors Rally to Purchase Israeli Bonds Amid Conflict
In the wake of the recent Hamas attack, the Development Corporation for Israel has experienced an unprecedented surge in bond sales in the United States, totaling $1 billion over the past month. This influx of investment marks a historic peak in the short-term sale of Israeli Bonds and positions 2023 as a record-breaking year for the financial instrument.
Following the October 7th events, which resulted in the tragic loss of at least 1,400 Israeli lives and the taking of 240 hostages, the Israeli Ministry of Finance issued new bonds, catalyzing this considerable financial support.
The bonds have attracted significant interest from a range of institutional buyers, including 15 state and municipal bond funds and select banks. The list of state government investors comprises Florida, New York, Alabama, Arizona, Ohio, Illinois, Texas, Georgia, Oklahoma, Nevada, Louisiana, South Carolina, Indiana, and Pennsylvania.
In addition to institutional investments, the last four weeks have seen substantial purchases from two Florida counties, Broward and Palm Beach, and Franklin County in Ohio.
Cross River Bank in New Jersey and Key Bank in Cleveland have also made substantial purchases, with Key Bank's $15 million investment highlighting a longstanding 35-year relationship with Israel Bonds.
Private investors across the United States have also contributed significantly, with $250 million of the total sum raised coming from individuals who bought bonds directly.
Dani Naveh, President and CEO of Israel Bonds, in a conversation with CNBC, characterized the robust sales as a testament to both solidarity with Israel and confidence in its economic stability.
Despite the ongoing conflict, which has resulted in a high casualty count in Gaza and sparked international protests, the bond sales signify strong financial backing for Israel's economy and its community rebuilding efforts.
Naveh, who resides near Tel Aviv, shared a personal account of the conflict's impact on his community, emphasizing the crucial role that Israel Bonds play in reconstruction and support for the Israeli people.
Prior to the hostilities, the Development Corporation for Israel had already achieved its 2023 sales goal of $1 billion. The post-attack surge has now doubled this target, pushing total sales beyond $2 billion.
New York State's recent purchase of $20 million in Israeli Bonds, increasing its total holdings to $267 million, underscores the state's confidence in Israel's resilience and economic prospects.
Funds raised from the bond sales are earmarked for community restoration in southern Israel and to cover medical expenses for those injured in the attacks.
Naveh expressed confidence in Israel's economic recovery post-conflict, drawing on historical resilience and predicting a stronger security and economic landscape following the defeat of Hamas.
Since its inception in 1951, shortly after Israel's establishment in 1948, the Development Corporation for Israel has facilitated over $50 billion in Israel Bond sales, supporting various aspects of the country's development and infrastructure.