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CORRECTED-REFILE-UPDATE 1-Israel preps euro return after three-year hiatus

reuters.com

(Corrects length of absence from the euro market)

By Robert Hogg

LONDON, Jan 4 (IFR) - The State of Israel is planning to bring its first euro deal in around three years, having mandated banks for a trade that could emerge as early as next Wednesday.

The issuer has appointed Bank of America Merrill Lynch, Barclays and Citigroup to organise investor meetings in the UK and Europe starting January 9, according to a lead.

The sovereign will visit Germany and France next Monday, followed by the Netherlands and London on Tuesday, with a 10-year benchmark expected to follow.

Israel could also consider a longer-dated tranche, subject to demand.

"They do these exercises as benchmarking and credit marking as opposed to strictly funding," said a lead banker. "If there is a good level of interest beyond 10-years, they might look at it."

The sovereign last came to international markets in 2014 with a 1.5bn January 2024 transaction, and is returning in order to keep its curve liquid, the lead said. That deal was bid at a Z-spread of 58bp, according to the lead.

"From a trading perspective, Israel is relatively attractive compared to the rates market," the lead said.

"But it will of course garner interest from emerging markets investors. It's one of the most stable sovereigns from an economic perspective, with a credible track record of growth, and it has benefited greatly from the tech boom."

Israel is rated A1 by Moody's, A+ by S&P and A+ by Fitch.


(Reporting by Robert Hogg, Editing by Helene Durand, Julian Baker)

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