Israel’s credit spreads widen significantly due to the war, but it continues to raise funds in the international bond market.
Rating agencies have placed Israel’s rating on negative watch or negative outlook due to the war between Israel and the Palestinian militant group Hamas that erupted in early October. They cite concerns that the Israel-Palestine conflict will impact Israel’s economic activity and investor confidence, although they have not downgraded the rating yet. The risk of Israel being downgraded will increase if the conflict goes beyond the Gaza Strip and lasts more than three to six months.
Israel’s credit spreads of US dollar bonds widened significantly after the war, however it continues to raise funds in the international bond market, accumulating a total of about US$4.4 billion since mid-October. Taking its most liquid 10-year US dollar bond as an example, the credit spread fluctuated between 85 and 115bps before the war. Currently, the credit spread has widened to around 150bps and stabilized, significantly higher than the credit spreads of countries with similar ratings in the Middle East, such as Kuwait at about 50bps and Qatar at about 40bps.
As the US Treasury benchmark rate fell sharply after hitting a high at the end of October, the yield on Israel’s 10-year US dollar bond rose to around 6.3% at the highest, and is currently at about 5.86%, up by about 20bps since the outbreak of the war; while the price dropped by up to 5% compared to before the war, and then rebounded. The bond price did not show a continuous decline, and the overall drop was not large.
Rating changes
Since the outbreak of the war between Israel and Hamas on 10/7, three credit rating agencies have put Israel’s rating on negative watch or negative outlook, but have not downgraded the rating. The rating agencies expect the war to cause Israel’s economic activity to shrink significantly by 5-10% in the fourth quarter of this year and affect investor confidence.
· On 10/17, Fitch placed Israel’s rating on negative watch, maintaining its long-term issuer rating at A+.
· On 10/19, Moody’s placed Israel’s rating on negative watch, maintaining its long-term issuer rating at A1.
· On 10/24, S&P placed Israel’s rating on negative outlook, maintaining its long-term issuer rating at AA-.
Primary market new issue
Since mid-October, Israel has issued four bonds denominated in Japanese yen, euro, and US dollar in the international bond market, raising a total of about US$4.4 billion equivalent.
· On 10/12, Israel issued a 3-year bond denominated in Japanese yen, raising 36 billion yen.
· On 10/30, Israel issued a 3-year bond denominated in euro, raising 1.8 billion euro.
· On 11/6, Israel issued an 8-year bond denominated in US dollar, raising 1.5 billion US dollar.
· On 11/21, Israel issued a 4-year bond denominated in US dollar, raising 725 million US dollar.
Secondary market trading
· Israel 6.25% 2027 bonds traded near 6.01%, down by about 24bps since its issuance on 11/21.
· Israel 6.5% 2031 bonds traded near 6.16%, down by about 34bps since its issuance on 11/6.
· Israel 4.5% 2033 bonds traded near 5.86%, up by about 20bps since the outbreak of the war.
以色列的信用利差雖因戰事大幅走寬，但仍持續在國際債券市場融資
10月上旬，以色列與巴勒斯坦激進組織哈瑪斯爆發戰爭至今，三家信評公司皆因戰爭事件將以色列之評級置入負向觀察名單或負向展望，認為以巴衝突將影響其經濟活動與投資人信心，但目前暫未調降評級。若衝突超出加薩地區、且時間超過3至6個月，以色列遭調降評級的風險將上升。
以色列的信用利差在戰事爆發後大幅走寬，但仍能持續在國際債券市場融資，10月中旬以來累計募得資金約44億美元。以其最流通的10年期美元公債為例，戰爭爆發前的信用利差多在85~115bps之間波動，目前信用利差走寬至約150bps附近止穩，顯著高於中東地區相近評級國家之信用利差，如科威特約50bps、卡達約40bps。
隨著美債基準利率於10月底創高之後大幅回落，以色列的10年期美元公債的收益率最高彈升至6.3%附近，目前約在5.86%，戰爭爆發至今彈升約20bps；而價格則是較開戰前最多下跌約5%，之後有所回升，債券價格並未出現持續性下跌，且整體跌幅不大。
信評變動
自10/7 以色列與哈瑪斯爆發戰爭以來，三家信評公司皆已將以色列之評級置入負向觀察名單或負向展望，但並未調降評級。信評公司預期戰爭將使以色列今年第四之季經濟活動顯著萎縮5~10%，並影響投資人信心。
· 10/17 惠譽將以色列之評級置入負向觀察名單，長期發行人信評維持A+
· 10/19 穆迪將以色列之評級置入負向觀察名單，長期發行人信評維持A1
· 10/24 標普將以色列之評級置入負向展望，長期發行人信評維持AA-
新券發行
10月中旬後，以色列於國際債券市場累計發行4筆日幣、歐元、美元計價債券，合計募資約當44億美元
· 10/12 發行3年期日幣計價公債，募資360億日元
· 10/30 發行3年期歐元計價公債，募資18億歐元
· 11/6 發行8年期美元計價公債，募資15億美元
· 11/21 發行4年期美元計價公債，募資7.25億美元
次級市場交易
· 以色列（ISRAEL）6.25% 2027年券收益率約6.01%，11/21發行至今走低約24bps
· 以色列（ISRAEL）6.5% 2031年券收益率約6.16%，11/6發行至今走低約34bps
· 以色列（ISRAEL）4.5% 2033年券收益率約5.86%，戰爭爆發後彈升約20bps