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February 12, 1993 - Image 78

Resource type:
Text
Publication:
The Detroit Jewish News, 1993-02-12

Disclaimer: Computer generated plain text may have errors. Read more about this.

BUSINESS

6.50%

Fixed Annual Interest Rate
For Bonds Purchased Through December 17, 1992

We Recommend This One:

800-334-5802

mr HE FIXED ANNUAL INTEREST

1 RATE FOR ISRAEL'S new
Economic Development Issue (EDI)
Bond may surprise you, but it
shouldn't. For more than 40 years,

investors have been attracted by
Israel's appealing bond interest rates
and the nation's perfect record of
payment on principal and interest.
Since Israel began its Bonds
program in 1951, investors have
purchased more than $12 billion in
the nation's securities.

The EDI's Flexible Terms Are Ideal
for Many Investors

Israel's EDI Bond — the first new
security the nation has issued in
more than two years — has an early
redemption privilege that makes it an
ideal investment for many retirement
accounts, such as IRAs, Keoghs,
pension or profit sharing plans, and
union funds. The early redemption
option also makes the EDI well-
suited for many institutional and
personal investment portfolios.

The Early Redemption Privilege
Works Like This:

When you purchase an EDI for a
retirement plan, you can redeem the
Bond four years after issue date. EDI
Bonds purchased for personal and
institutional investment portfolios can
be redeemed five years after issue
date. The Bonds are redeemed on
120 days notice, which may be given
prior to the expiration of the relevant
holding period. The redemptions are
made at WO percent of the principal
amount plus any accrued interest.

The minimum initial investment
is $25,000. The EDI matures on
December 31, 2002.

Call the toll-free number above to
obtain a prospectus and to learn
more about Israel's investment
opportunities.

This is not an offering, which can be made only
by a prospectus from:

Development Corporation For Israel

ISRAELBONDS

THE DETRO I T JEWIS H NEWS

29201 Telegraph Road, Suite 324
Southfield, MI 48034
313-352-6555

B14

Market Fact

Advertising is an integral part of the information package
welcomed by Jewish News readers every week.
*90% actively seek advertising information in
The Jewish News every week.

Source: Scarborough-Jewish News Study.

THE JEWISH NEWS

Israel Bonds Pay
Hefty Returns

KIMBERLY LIFTON STAFF WRITER

S

ince David Ben-Gurion
launched the first Is-
rael Bond campaign in
Madison Square Gar-
den in 1951, bonds have been
viewed as a tool to help Israel
by providing funds to develop
and expand the economy.
Typically, investors would
purchase bonds, which paid a
4 percent annual yield, forget
about the money, and rein-
vest in new bonds when the
certificates matured.
Yet focus has changed over
the past decade as Bonds
have become competitive with
other investment opportuni-
ties. And returns on Israel
Bonds can provide generous
returns, with some funds pay-
ing over 6 percent interest.
U.S. funds — government
and stock — have been hover-
ing around the 3 percent
mark.
"The return on the invest-
ment is at least as good as
some alternative investment,"
said Sol Freedman, Israel
Bonds' national director for
institutional investments.
"Today we are trying to con-
vince people that they can in-
vest in Israel Bonds with
money they don't give away
to charity.
"A lot of people still look at
Israel Bonds the old way, and
it is hard to change that
mindset," Mr. Freedman said.
"This money helps Israel in
absorption and immigration."
Securities today offered by
Israel Bonds include many
personal investment portfo-
lios, as well as retirement and
pension funds such as IRAs
and Keoghs.
Proceeds from bonds have
been used to develop indus-
trial, agricultural and tech-
nological projects. Since 1990,
Israel has used proceeds from
Bond sales for programs that
help absorb new immigrants.
Bonds available for pur-
chase are:
• Economic Development
Issue Bond, with a $25,000
minimum purchase. This
bond matures on Dec. 31,
2002, and it pays 6.5 percent
interest every six months.
Early redemption privileges
are available after four years.
• The Individual Variable
Rate Issue Bond pays at least
a 5 percent annual interest
rate. Current interest rate is
5.5 percent. This fluid is avail-
able for IRAs, and its mini-
mum purchase is $2,000.
Maturity date is 12 years

from purchase, and early ref
demption privileges are avail-
able.
• Zero Coupon Savings
Bond pays 6.6 percent annu-
al yield. These bonds are
called infrastructure and ab-
sorption bonds, which mature
at S6,000 on Dec. 31, 2001.
The purchase price and effec-
tive yield to maturity are sub-
ject to change each quarter.
• Current Income Bond
pays 4 percent annually and
matures 15 years from date ofl
purchase. The minimum pur-
chase is $500.
Proceeds from the pro-
gram's first year resulted in
sales of $50 million. To date,
more than $12 billion in State
of Israel securities have been/
purchased worldwide. In 1992
— a record-breaking year —
more than $1 billion was in-
vested in Israel Bonds.
In Michigan (see chart),
sales of Israel Bonds have in-
creased from $2.5 million in
1951 to $19.7 million in 1992.
Since its inception, Israel)
never has defaulted on its
bonds, which are backed by
the full faith and credit of Is-
rael. Throughout the pro-
gram's history, Israel has
made every interest payment
in full and on time.
'4
"Even though Israel has
gone through periods of war
and hyper-inflation, we still
have never had a default on a 1
bond," Mr. Freedman said.
'We rely on our perfect pay-
ment record."
Many believe Israel' s de- 4
velopment over the past 44
years could not have taken
place without the sale of I
bonds, from which proceeds
are channeled into the Israel
Government' s Development
Budget.
Among the projects fi-
nanced with Bond proceeds
were the expansion project for
the deepwater port at Haifa,
1951; improvements at the
Dead Sea Works, where mil- ,
lions of tons of magnesium ,
chloride are extracted, mak-
ing Israel one of the world' s
largest exporters of large-
scale chemical fertilizer, 1952;
and construction of the
Jerusalem-Tel Aviv super-
highway, 1978.
Many infrastructure pro-
jects — including construction
of highways, roads, steel 4
pipelines for oil supplies,
satellite ground stations for
communications — were built
with bond monies as well. ❑

.

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