TASE launches Tel Bond-Dollar Index

Jun 10th, 2018 | By | Category: Fixed Income

The Tel-Aviv Stock Exchange (TASE) has launched the Tel Bond-Dollar Index, consisting of dollar-linked corporate bonds listed on TASE.

Tel Aviv Stock Exchange

The index is the seventh Tel-Bond index launched by Tel Aviv Stock Exchange this year.

According to TASE, dollar-linked corporate bonds are generally high quality and offer a higher yield that CPI-linked and shekel (local Israeli currency) bonds.

As of 6 June 2018, the index had a weighted gross internal rate of return (IRR) of 5.7% – a yield that would likely be attractive for income-seeking investors should the index ultimately be adopted by an ETF. The index’s duration is 4.2 years.

The index is be composed solely of dollar-linked bonds, which are rated with at least an A- rating by S&P’s Maalot or an A3 rating by Moody’s-affiliated Midroog.

The maximum weight for any bond series that will be included in the index will be 12% and the maximum number of series for a single issuer will be limited to two (in other words, the maximum weight per issuer will be 24%).

The index currently contains 11 issuers for a total of 14 series, covering approximately a ILS 13.4 billion ($3.7bn). The largest issuer is Tamar Petroleum which holds the maximum allowable weight of 24%. Bonds from the oil and gas exploration sector represent the largest industry group in the index with a weight of 57%.

The new index brings the total number of Tel Bond indices calculated by TASE to 29, ten of which were launched in 2017 and six additional indices were launched since the beginning of 2018.

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