Israel’s Debt Market Rewards Stronger Borrowers With Scale and Term

Israel’s estimated NIS 118.7 billion of corporate debt issuance in the first half of 2026 does not mean every borrower received comparable access to capital. Financial institutions accounted for half the amount, while outside finance, issuers rated il.Baa or unrated represented 39% of borrower count but only 23% of nominal volume. Leumi and Azrieli show what the stronger end of the market can obtain: large unsecured issues with principal pushed years into the future. Ampa, by contrast, is currently considering one-year commercial paper intended mainly to refinance existing financial debt and support ongoing operations. This does not prove that the debt market is closed, since issuance by lower-rated and unrated companies increased and seven borrowers entered the market for the first time. It does show why scale, rating, maturity, collateral and use of proceeds must be read together before concluding that a borrower has improved its financial flexibility.

Two Deep Pools Drive the Record

According to Midroog’s corporate debt market review, first-half issuance was estimated at NIS 118.7 billion, about 65% above the comparable NIS 72.1 billion. The growth was concentrated. Financial institutions issued NIS 59.3 billion, or half the market, while real estate and construction companies supplied another NIS 31.6 billion. Together, those two pools accounted for about 77% of nominal issuance.

That composition changes the meaning of the record. A regulated bank with repeated market access, or a highly rated property company backed by income-producing assets, does not compete for the same terms as a smaller borrower with a weak rating or no rating. The NIS 17.5 billion of commercial paper, about 15% of total issuance and largely issued by banks, also should not be treated as equivalent to maturity extension. It supplies short-term liquidity, not multi-year funding certainty.

Borrower Count Is Broader Than Funding Volume

Outside the financial sector, companies rated il.Aaa or il.Aa captured 44% of nominal value while accounting for only 23% of issuer count. At the other end, il.Baa and unrated borrowers represented 39% of issuer count but received 23% of the money. Unrated borrowers alone were 35% of issuers and 19% of nominal volume.

The data does not describe a complete shutdown. Lower-rated and unrated companies issued NIS 12.3 billion, up from NIS 9.4 billion in the comparable period, and seven first-time issuers entered the market in June. The important distinction is between being able to issue something and obtaining high-quality funding. A broad set of borrowers can reach the market while most of the volume, term and flexibility remain concentrated among stronger names.

Long-Term Funding Is the Scarcer Product

Leumi completed a June institutional offering of two senior unsecured note series totaling USD 1 billion. The notes mature in 2029 and 2033 and carry fixed coupons of 5.343% and 5.642%. Proceeds were designated for business growth, management of foreign-exchange exposure and general corporate purposes. In April, Leumi had already raised about NIS 2.719 billion through bonds and NIS 1.346 billion through commercial paper in the same offering process. The advantage is not only scale. It is the ability to choose between term funding and short-duration liquidity within one financing program.

Azrieli raised about NIS 2.103 billion in June through a new CPI-linked bond series carrying a 3.02% annual coupon. The debt is unsecured, rated il.AA+, and its principal is repaid in ten annual installments from 2042 through 2051. For balance-sheet management, this does more than add cash. It locks in very long-term capital and pushes the bulk of principal repayment more than 15 years into the future.

Ampa is presenting a different product. As of the reporting date, it was only considering up to NIS 250 million of commercial paper rated il.A-1+. The unsecured instrument bears a floating rate based on the Bank of Israel rate plus a spread and is repaid in one payment in July 2027. The rating agency said proceeds would mainly refinance existing financial debt and fund ongoing operations. Until the offering is completed, neither the final amount nor the final spread is known. Even if completed, the instrument would improve one-year liquidity rather than replace long-term debt.

This does not mean Ampa is excluded from long-term funding. In September 2025, it issued about NIS 1.747 billion of unsecured bonds carrying a 3.32% coupon. That history sharpens the distinction: the same issuer can use long bonds to change its maturity schedule and commercial paper to address a current funding need, but the two instruments do not create the same flexibility.

The Second Half Will Test Size, Price and Maturity

The key second-half measure will not be aggregate issuance alone. Investors need to see how much new debt actually extends maturities, which borrowers receive unsecured capital, and what effective spreads emerge after tenders are completed. For weaker issuers, a rising share of short, secured or expensive debt would show that the market is supplying liquidity without resolving refinancing pressure.

The opposite result would weaken the bifurcation thesis. More long-term issuance by lower-rated companies, combined with tighter spreads and no material hardening of collateral or covenants, would indicate that access is broadening in quality as well as borrower count. Until then, NIS 118.7 billion describes a deep and active market, but not a uniform price or equal access to time.