Discount Bank Raises Half a Billion Euros in Landmark International Bond Offering

Discount Bank has successfully completed its first international offering of mortgage-backed covered bonds, raising approximately 500 million euros from institutional investors outside of Israel. The issuance garnered significant demand, reaching about 1.4 billion euros (approximately 5 billion shekels), reflecting international market confidence in the bank's financial strength, asset quality, and management strategy.

The five-year bonds were issued at a spread of 67 basis points, resulting in an annual interest rate of 3.875%. The offering received high international credit ratings, including AA- from Fitch and Aa3 from Moody's. Notably, these ratings surpass those assigned to Israeli government bonds in their recent issuances, and the interest rate is approximately 5 basis points lower than comparable Israeli government bonds.

This groundbreaking move for Discount Bank in the global markets is built upon advanced financial architecture and diversification of long-term capital sources. The issuance attracted considerable interest from a wide range of investors, including leading institutional entities from across Europe. Avi Levy, CEO of Discount Bank Group, stated that the international offering is a significant milestone in the bank's growth strategy, aiming to establish a diverse and stable funding platform that provides financial flexibility, reduces borrowing costs, and grants access to a broad, high-quality global investor base. He added that the trust from international markets is a testament to Discount Bank's financial resilience.

The transaction was led by Elad Fisher, Head of the Financial Markets Division, and Naama Levi, CEO of Discount Issuers. Leading international underwriters involved in the offering included Barclays Bank PLC, Citibank Europe plc, Deutsche Bank Aktiengesellschaft, Goldman Sachs International, and Merrill Lynch International. Discount Bank indicated that the bonds are expected to be registered with the Tel Aviv Stock Exchange's institutional continuity system, pending necessary approvals.