
Israel Bonds, the commonly known name of Development Corporation for Israel (DCI), is the U.S.
underwriter
Underwriting (UW) services are provided by some large financial institutions, such as banks, insurance companies and investment houses, whereby they guarantee payment in case of damage or financial loss and accept the financial risk for liability ...
of
debt securities issued by the
State of Israel
Israel, officially the State of Israel, is a country in West Asia. It Borders of Israel, shares borders with Lebanon to the north, Syria to the north-east, Jordan to the east, Egypt to the south-west, and the Mediterranean Sea to the west. Isr ...
. DCI is headquartered in
New York City
New York, often called New York City (NYC), is the most populous city in the United States, located at the southern tip of New York State on one of the world's largest natural harbors. The city comprises five boroughs, each coextensive w ...
and is a
broker-dealer
In financial services, a broker-dealer is a natural person, company or other organization that engages in the business of trading securities for its own account or on behalf of its customers. Broker-dealers are at the heart of the securities and ...
and member of the
Financial Industry Regulatory Authority
The Financial Industry Regulatory Authority (FINRA) is a private American corporation that acts as a self-regulatory organization (SRO) that regulates member brokerage firms and exchange markets. FINRA is the successor to the National Associati ...
(FINRA).
Dani Naveh is president and CEO.
Bonds are sold in Canada through Canada-Israel Securities, Ltd.; in Europe through Development Company for Israel GmbH; and in the United Kingdom through Development Company for Israel, Ltd. Sales have increased steadily since the initial Independence Issue was offered in 1951, with total worldwide sales now exceeding $48 billion.
At first, investors in Israel bonds were largely members of the
American Jewish community looking to support the fledgling state's economy. However, throughout subsequent years, private and institutional investors alike viewed Israel bonds as meaningful investments. Over 90 U.S. state and municipal pension and treasury funds have invested more than $3 billion in Israel bonds to date. Other investors in Israel bonds include corporations, insurance companies, associations, unions, banks,
financial institution
A financial institution, sometimes called a banking institution, is a business entity that provides service as an intermediary for different types of financial monetary transactions. Broadly speaking, there are three major types of financial ins ...
s, universities, foundations, non-profits and
synagogue
A synagogue, also called a shul or a temple, is a place of worship for Jews and Samaritans. It is a place for prayer (the main sanctuary and sometimes smaller chapels) where Jews attend religious services or special ceremonies such as wed ...
s. Israel uses proceeds from the sale of the bonds for general purposes of the state.
Origins

The idea to float bonds issued by Israel's government was conceived by Israel's first
prime minister
A prime minister or chief of cabinet is the head of the cabinet and the leader of the ministers in the executive branch of government, often in a parliamentary or semi-presidential system. A prime minister is not the head of state, but r ...
,
David Ben-Gurion
David Ben-Gurion ( ; ; born David Grün; 16 October 1886 – 1 December 1973) was the primary List of national founders, national founder and first Prime Minister of Israel, prime minister of the State of Israel. As head of the Jewish Agency ...
, in the aftermath of the
1948 Palestine war, when the nation was critically short of economic resources.
Ben-Gurion turned to
Diaspora Jewry, with the goal of obtaining millions of dollars in funding by engaging them as active partners in building the new Jewish state. In September 1950, he convened a meeting of American Jewish leaders at Jerusalem's
King David Hotel, where Ben-Gurion shared his vision for a bond issue, which the delegates supported. The
Knesset
The Knesset ( , ) is the Unicameralism, unicameral legislature of Israel.
The Knesset passes all laws, elects the President of Israel, president and Prime Minister of Israel, prime minister, approves the Cabinet of Israel, cabinet, and supe ...
voted to launch Israel's first bond issue in February 1951. In May, the prime minister traveled to New York City to help launch the inaugural Independence Issue at a
Madison Square Garden
Madison Square Garden, colloquially known as the Garden or by its initials MSG, is a multi-purpose indoor arena in New York City. It is located in Midtown Manhattan between Seventh Avenue (Manhattan), Seventh and Eighth Avenue (Manhattan), Eig ...
ceremony, raising $35 million. Expectations for first-year sales were $25 million. Instead, final results for 1951 more than doubled projections, exceeding $52 million.
Achievements
By 1957, "bond sales alone amount(ed) to an astonishing 35% of Israel's special development budget", with Foreign Minister
Golda Meir
Golda Meir (; 3 May 1898 – 8 December 1978) was the prime minister of Israel, serving from 1969 to 1974. She was Israel's first and only female head of government.
Born into a Jewish family in Kyiv, Kiev, Russian Empire (present-day Ukraine) ...
emphatically stating, "the central role in building our economic strength has been played by Israel bonds."
Over subsequent decades sales continued to increase, particularly in times of crisis. During 1967's
Six-Day War
The Six-Day War, also known as the June War, 1967 Arab–Israeli War or Third Arab–Israeli War, was fought between Israel and a coalition of Arab world, Arab states, primarily United Arab Republic, Egypt, Syria, and Jordan from 5 to 10June ...
, sales exceeded $250 million, and in 1973, the year of the
Yom Kippur War
The Yom Kippur War, also known as the Ramadan War, the October War, the 1973 Arab–Israeli War, or the Fourth Arab–Israeli War, was fought from 6 to 25 October 1973 between Israel and a coalition of Arab world, Arab states led by Egypt and S ...
, sales exceeded $500 million. In 1991, the year of the
Gulf War
, combatant2 =
, commander1 =
, commander2 =
, strength1 = Over 950,000 soldiers3,113 tanks1,800 aircraft2,200 artillery systems
, page = https://www.govinfo.gov/content/pkg/GAOREPORTS-PEMD-96- ...
and Iraqi missile strikes on Israel, sales exceeded $1 billion.
[ In 2020, in response to the ]COVID-19 pandemic
The COVID-19 pandemic (also known as the coronavirus pandemic and COVID pandemic), caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), began with an disease outbreak, outbreak of COVID-19 in Wuhan, China, in December ...
, Israel Bonds approached the Finance Ministry to increase its goal for the year. The Finance Ministry approved the initiative, and the year concluded with record U.S. sales exceeding $1.5 billion. In the first four weeks of the 2023 Israel-Hamas war, several U.S. states invested $300 million; by November 11, 2023 a record-breaking $1 billion had been purchased by investors large and small. (Total worldwide sales of the bonds they were first issued in 1951 had exceeded $48 billion by October 2022.)
Securities
Initially, Israel Bonds offered a single investment option. As the program became more successful, multiple types of Israel bonds with varying maturities and purchase minimums were made available. The following bonds are/were offered in 2022:
* Jubilee Bonds – fixed rate 2, 3, 5, 10 and 15-year bonds; $25,000 minimum investment.
* Maccabee Bonds – fixed rate 2, 3, 5, 10 and 15-year bonds; $5,000 minimum investment.
* Sabra Bonds – fixed rate 3-year bonds; $1,000 minimum investment. Interest is paid upon maturity.
* Mazel Tov Bonds – fixed rate 5-year bonds; $100 minimum investment. Interest is paid upon maturity.
* eMazel Tov Bonds – fixed rate 5-year bonds; $36 minimum investment. Interest is paid upon maturity. Available only online.
* Shalom Bonds - fixed rate 1 and 2-year bonds; $36 minimum investment. Interest is paid upon maturity. May only be held by a religious, charitable, literary, scientific or educational organization, contributions to which are, at the time of transfer, deductible for income and similar tax purposes. Available only online.
* Jubilee Fixed Rate Financing Bonds – 2-year bonds; minimum subscription of $100,000; must be financed through an Authorized Lender.
Although Israel has never defaulted in the payment of principal or interest on any of its internal or external debt, prospective purchasers are warned of sovereign credit risk.
Ethics issues
In July 2024, an investigation by the International Consortium of Investigative Journalists (ICIJ) revealed that Israel Bonds was engaged in efforts to court taxpayers' money in the form of public investments in the bonds. After the outbreak of war between Israel and Gaza on 7 October, it was reported that activists, including members of Jewish Voice for Peace, began to target the Bonds in demands that corporations and institutions divest from financial instruments that appear to support the government of Israel.[Spencer Woodman, Joanna Robin]
US officials are investing public funds in Israeli bonds in deals that raise ethics concerns,'
The Guardian
''The Guardian'' is a British daily newspaper. It was founded in Manchester in 1821 as ''The Manchester Guardian'' and changed its name in 1959, followed by a move to London. Along with its sister paper, ''The Guardian Weekly'', ''The Guardi ...
25 July 2024. According to Richard Painter, who worked as chief White House ethics lawyer during the George W. Bush administration, the mixing of personal and official practices evidenced in transcripts of email documents exchanged to secure bond purchases in the U.S. appears to "go well beyond what's seen as acceptable." Michael Frerichs, the Illinois treasurer stated: "We have been purchasing these Israel bonds for over 20 years. We get a good return, and so we were open to more purchases. But after the Hamas attack on Israel, we figure that they would be issuing more bonds. And we also wanted to show our support for an ally at a time of a terrorist invasion."
These issues came to play a role in Pennsylvania's 2024 treasurer race between Stacy Garrity and Erin McClelland. In October 2023, Pennsylvania State Treasurer Stacy Garrity purchased $20 million in Israel Bonds, bringing Pennsylvania's investment in Israel Bonds to a total of $56 million. Erin McClelland, Garrity's opponent in the November general election, said that she did not believe that the state should invest in foreign bonds, particularly when it meant taking sides in an overseas conflict.
Presidents of the Bonds
* Michael Arnon: 1974 to 1979 - The first Israeli in the role
* ?–1979: Yitzhak Rager
* 1979–1985: Yehuda Halevi
* 1989–1994: Meir Rosen
* 1994–1997: Nathan Sharoni
* 1997–2002: Gideon Pat
* 2002–2011: Yehoshua Matza
* 2011–2016: Israel Tapuchi
* 2016–2021: Israel Maimon
* 2021–Present: Danny Naveh
References
External links
*
{{DEFAULTSORT:State Of Israel Bonds
Securities (finance)
Government of Israel
Finance in Israel
Government bonds issued by Israel
Jewish organizations based in New York City
Zionist organizations in the United States