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| 22.8.2010 |
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| Business Sector Debt June–July 2010 |
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| For links to Information and Data on the Bank of Israel website - Click here |
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| The business sector's outstanding debt increased |
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The total outstanding debt of the business sector increased in June by NIS 7.8 billion (1.1 percent) to NIS 743 billion. |
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The increase was due mainly to the combination of price increases (shekel depreciation and an increase in the CPI) on the one hand, and new net borrowing both from banks and via the issue of negotiable bonds, together totaling NIS 4.5 billion, on the other. These were partly offset by repayment of NIS 1.5 billion of nontradable debt and foreign debt. |
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In the first half of 2010 the debt of the business sector increased by about NIS 6.8 billion (0.9 percent), mainly due to the depreciation of the shekel by about 2.6 percent against the dollar and net new bank loans. |
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| Issues of bonds |
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Business sector bond issuance in July totaled about NIS 2.9 billion, of which NIS 2.7 billion were negotiable bonds. Total issues in July were higher than the monthly average of NIS 2.2 billion in the last twelve months, and similar to the level in June, following the low level of issuance in May. |
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Since the beginning of 2010 the business sector has issued about NIS 14 billion of bonds, most of which were bonds negotiable on the Tel Aviv Stock Exchange (TASE). |
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| The cost of the debt |
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The margin between interest on credit and that on deposits in the unindexed sector contracted slightly in June, as the average interest on unindexed credit declined a little. |
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In June the spread between corporate bond yields (the Tel-Bond 60 index) and yields on indexed government bond widened by 0.1 percentage points, following its 0.3 percent increase in May, and reached 2.2 percentage points, against the background of the increase in risk in the financial markets in that period. |
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