Israel raises $500 million in bond issue

Israel's dollar-denominated debt is rated "A3" by Moody's and "A-" by Standard & Poor's. Both rating services said that the security situation is becoming less of an issue because the peace process is developing into a fait accompli.

Both also cited economic reforms, low inflation and the government's commitment to continue reducing the budget deficit.

The Israeli Treasury reported that more than 90 institutional investors from around the world -- primarily insurance companies, pension funds, and fund managers -- purchased the 10-year notes at a 7.819 percent yield. Roughly 65 percent were sold to U.S. investors.

The government is planning on raising roughly $2.3 billion in debt overseas this year: $850 million through the Israel Bonds organization, $820 million drawn down from when U.S. loan guarantees were still in force, $500 million from last month's issue, and $150 million in a private placement.