Israel has sold record amount of debt in US since war on Gaza erupted: Report

Israel has sold a record amount of debt in the US since its war on Gaza erupted on 7 October 2023, according to a report by Bloomberg on Friday. 

The government of Israel’s US-based bond broker, Israel Bonds, says it has sold $5bn worth of debt in the last twenty months. The level of bond issuance is more than double that raised by Israel Bonds, in similar time periods previously.

Israel’s war on Gaza started after the 7 October 2023 Hamas-led attacks on southern Israel killed around 1,200 people. Israel responded by pummelling the Gaza Strip and invading it. More than 54,000 people, mainly women and children, have been killed in the Israeli attacks, and the population is facing "imminent famine", the United Nations says. 

Israel Bonds is affiliated with Israel’s finance ministry and sells bonds inside the US to both retail and institutional investors. The starting price for non-tradable retail Israeli bonds is as low as $36. 

A five-year Israeli bond has a yield between 4.86 percent and 5.44 percent, according to the Bloomberg report. 

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Along with its war on Gaza, Israel fought a devastating war with Hezbollah in Lebanon and launched widespread strikes on Syria. In 2024, it engaged in two rounds of direct missile and drone attacks with Iran. Israel’s financing needs have soared as it looks to fund its military.  

Local Israeli creditors, including deep-pocketed institutional ones, account for about 80 percent of the government’s lending overall. That leaves just twenty percent to come from international debt sales and what Israel Bonds sells in the US.

According to the group, local US governments at the state and county level are big buyers in places like New York, Texas, Ohio, and Illinois. 

Palm Beach County in Florida became one of the world's largest investors in Israeli Bonds in 2024, with about $700m of its $4.67bn portfolio invested there. 

Israel has faced widespread criticism for its war on Gaza. The International Criminal Court has issued an arrest warrant for Prime Minister Benjamin Netanyahu and former Defence Minister Yoav Gallant for alleged war crimes. Meanwhile, public opinion on Israel has turned sharply negative from France to Japan. 

However, in March 2024, Israel saw strong demand for its debt among international investors. It sold $8bn in international bonds. Israel enjoys investment-grade ratings from major credit ratings agencies. 

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