STATE OF ISRAEL
MINISTRY OF FINANCE
SPOKESPERSON'S OFFICE INTERNATIONAL AFFAIRS
DEPARTMENT

1 Kaplan St. Jerusalem 91030, P.O. Box 3100, Tel: 02-5317200, Fax:
02-5695349
English: www.financeisrael.mof.gov.il Hebrew: www.mof.gov.il
July 5, 2011
2011-1754

Press Release

USD 400 Million Raised by the Accountant General in a Private Placement to
One of the World's Largest Asian Investors

The Accountant General at the Ministry of Finance has completed a USD 400
million private placement of one-year government bonds to one of the world's
largest Asian investors. The bonds were issued as part of the government's
European Medium Term Note (EMTN) shelf registration program, with
Goldman-Sachs acting as underwriter. The private placement was carried out
at the request of the Asian investor, who is considered to be a strategic
investor in the global capital markets and for whom this is the first
investment in Israeli government bonds.

The deal was executed at a one-year dollar interest rate of 1.599%. In
Shekel terms, the financing costs of the private placement are about 0.3%
lower than the costs in the domestic market, based on the yield of
short-term notes for the same period.

The Minister of Finance, Dr. Yuval Steinitz, said: "The Ministry of Finance
sees great importance in exploring new markets, particularly the rapidly
developing Asian one. Israel's exposure to Asia's financial markets opens
the door for Israeli companies interested in conducting commercial activity
with Asian countries. The fact that investors of this magnitude have chosen
to invest in the State of Israel is further proof of the strength and
stamina of the Israeli economy."

The Accountant General in the Ministry of Finance, Michal Abadi-Boyanjo,
noted: "This issuance was carried out in accordance with the Accountant
General's Department action plan to establish and strengthen financial bonds
between the State of Israel and the economies of the Far East; These account
for an increasingly substantial share of the global economy, and are
currently a linchpin of international financing."

The Senior Deputy Accountant General, Eran Heimer, who led the deal, added:
"This is the third issuance to an Asian investor within a span of one and a
half years, as the previous issuance was carried out in March 2011. The Debt
Management Unit will continue in its mission to reach out to strategic
investors, in order to increase their involvement in tradable government
bonds, and at the end of the day reduce government financing costs.
We will continue to pursue attractive opportunities for implementing
financial transactions such as this latest private placement.

This latest private placement was preceded by six others:
1999: GBP 100 million for 35 years
2001: JPY 20 billion for 30 years
2002: USD 75 million for 30 years (zero coupon)
2006: USD 500 million linked to the Brazilian Real for 1 year
2010: USD 200 million for 2 years
2011 USD 124 million for 1 year