“We’ve done our research”: Gulf funds pour hundreds of millions into Israel’s bond sale
Foreign demand tops $36 billion as Israel raises $6 billion in dollar-denominated debt.
Gulf investment funds invested hundreds of millions of dollars in Israel’s latest international bond issuance, which concluded with the government raising $6 billion, above the $5 billion it had originally sought. The Ministry of Finance said demand totalled $36 billion, reflecting strong confidence among international investors in Tuesday's offering of 5-, 10- and 30-year bonds, with spreads between 90 and 125 basis points over comparable U.S. Treasuries yields. Spreads returned to pre-war levels in the offering, which attracted some 300 investors in 30 countries.
The dollar-denominated issuance followed a series of meetings held by Accountant General Yali Rothenberg with institutional investors in Europe, the United States, and Asia. The decision to cap the offering at $6 billion reflected a desire to avoid higher interest rates and to prioritize participation by high-quality, long-term investors.
Israel’s total financing needs for 2026 are estimated at around NIS 200 billion ($63B). Raising more than NIS 20 billion ($6.3B) through overseas markets reduces pressure on domestic institutional investors and improves the state’s ability to raise funds locally at lower interest rates. Historically, roughly 85% of financing in similar fundraising cycles has come from Israeli institutions.
Strong demand was evident early in the process. Even before U.S. investors entered the books, demand had already reached $25 billion during U.S. morning trading hours.
The narrowing spreads are viewed as a signal of renewed confidence in Israel’s economic resilience among foreign investors. Strong demand is also expected to support upcoming discussions with credit rating agencies, led by incoming Accountant General Michal Abadi-Boiangiu, who will replace Rothenberg at the end of the month.
Meetings with funds from Gulf states and other Abraham Accords countries marked a shift in investor composition. This time, major sovereign and flagship funds participated, rather than smaller satellite vehicles that had joined previous offerings. During one presentation, a senior Gulf fund manager interrupted Rothenberg, saying: “We know everything. We’ve done our research. Reserve this amount for us in the fundraising,” before specifying a three-digit sum in millions of dollars.
