American pension funds are buying Israeli bonds. A display of strength and support
Israel, battling Hamas, is attempting to obtain financing in the markets. Support is being received, among others, from individual states. New York has just joined Pennsylvania, Florida, Illinois, Texas, Ohio, and other public American funds, which have spent $150 million on the purchase of Israeli bonds in recent days.
6:18 AM EDT, October 15, 2023
Even though in face of war with Hamas, Israel's credit rating is in question, individual states are spending millions from public funds to purchase Israeli government bonds. As Bloomberg notes, U.S. financial officials are not discouraged by a statement from Moody’s ratings team, which states that an ongoing conflict "could impact" debt issuers in Israel.
American's retirement savings in Israeli bonds
In recent days, the public pension fund of New York State has decided to purchase Israeli bonds, allocating $20 million to securities. This fund has one of the largest public pension programs in the United States, and has been buying Israeli bonds since the 90s. According to the status in 2023, the total value of Israeli bonds in the investment portfolio of the state pension fund is about $267.8 million.
The New York State pension fund is purchasing Israeli bonds because we have faith in the spirit of innovation and perseverance of the Israeli people, as well as the strength of our investments" - said Jeo DiNapoli, the New York State comptroller who prepares reports on employment and compensation in the New York financial industry, quoted in an official statement.
He added that "besides ensuring a steady return for pension fund members, Israel bonds help support one of our country's strongest allies." "I'm glad that so many other public funds have stepped up to purchase bonds and support Israel, the only democratic government in the region, during these tragic and difficult days," DiNapoli said.
Israeli bonds acquired by the fund have a 10-year maturity with a 5.96 percent coupon.
The States firmly stand with Israel
Thanks to this transaction, New York joined Pennsylvania, Florida, Illinois, Texas, Ohio and other public American funds that recently invested 150 million dollars in Israeli bonds. Public finance officials in Ohio, Florida, Texas, and Illinois also announced their own purchases of Israeli debt securities. Texas Comptroller Glenn Hegar announced his investment of 20 million dollars in Israeli bonds on Friday, providing liquidity to a country that's defending itself from Hamas.
"The State of Israel is a solid investment," Hegar said. "As a taxpayer from Texas, I am proud to be able to support our ally, and as your comptroller, I am convinced that this is a prudent financial decision for the state of Texas," he added.
