February 17, 2000
The Big Leagues
Israel Bonds adds interest rate as it tries to become global player
Israel Bonds: They're not just for bar and bat mitzvahs anymore.
That's the message the State of Israel Bonds organization wants to get across in announcing its new floating rate offerings. Rather than being seen as a quasi-charity and feel-good gift for 13-year-olds, the organization wants to be considered a legitimate investment option.
It hopes to do that by adding the London Interbank Offer Rate (LIBOR) to its notes and offerings. LIBOR is a floating interest rate based on the average daily lending rates offered by several London banks. It's considered a more international benchmark that takes global economics into account.
"It's significant because, to this day, some people view Israel Bonds as a less-than-veritable investment, mostly because of a lack of knowledge of the bonds," said a spokesman for Israel Bonds, adding that the addition of the LIBOR benchmark is "just another step" toward Israel Bonds being considered "a bona-fide investment option."
The LIBOR-based instruments "will provide investment options that could better reflect the environment of the global market," Gideon Patt, Bonds president and CEO, said in a statement.
Israel bonds are securities issued by the State of Israel to help build the country's economy and infrastructure. Proceeds go to Israel's treasury for general use. Historically, Israel Bond funds have been earmarked for projects such as highways and bridges. Current projects being used by Bonds money, a spokesman said, include water desalination and high-speed train projects.
"When you invest in Israel, you invest in the Jewish family business," he said.
Still, they could make a respectable bar or bat mitzvah gift.
For more information, call the Contact Development Corp. for Israel at 1-800-229-9650, or go to www.israelbonds.com
This story was contributed by the Jewish Telegraphic Agency