Debt Developments in the Nonfinancial Private Sector, Fourth Quarter of 2019

  

For an analysis of debt developments in 2019 overall, see “Nonfinancial private sector debt” in Part A of Statistical Bulletin for 2019 (translation forthcoming).

 

In the fourth quarter of 2019, the balance of nonfinancial private sector[1] debt increased by approximately NIS 21 billion (1.4 percent) to about NIS 1.5 trillion. The balance of business sector debt increased in the quarter by NIS 14 billion (1.5 percent) to NIS 958 billion. The balance of household debt increased by NIS 7 billion (1.2 percent) to NIS 588 billion, with most of the increase in housing debt.

 

The nonfinancial business sector’s outstanding debt[2]

  •       In the fourth quarter of 2019, the balance of business sector debt increased by approximately NIS 14 billion (1.5 percent), to NIS 958 billion. The increase derived from significant positive net funds raised (movements) of NIS 16 billion, made up mostly of loans from nonresidents. This increase was partly offset by a 0.7 percent appreciation of the shekel against the dollar, which reduced the value of the debt denominated in and indexed to foreign currency (Figure 1).
  •      In the fourth quarter, the business sector issued about NIS 16 billion in bonds, markedly higher than the quarterly average amount raised in the preceding 4 quarters (of about NIS 8.6 billion per quarter). Companies in the real estate and construction industry continue to lead in financing, with about half the issuances in the quarter by those companies. Companies in the Investments industry, with the second largest financing in the quarter, made up about 15 percent of total funds raised in the quarter. In January 2020, the business sector issued bonds worth about NIS 3.6 billion, mostly in tradable bonds. (Figure 3).
  •      In the fourth quarter, the spread between yields on corporate bonds that are included in the Tel Bond 60 index, and the yield on CPI-indexed government bonds narrowed by about 0.2 percentage points to about 0.9 percentage points, further to narrowing in the previous three quarters. In January 2020, the spread widened slightly, to about 1 percentage point (Figure 4).



[1] Data on debt to banks are based on monthly balance sheet data and not on annual financial statement data, as the annual reports for 2019 have not yet been published.

[2] Israeli firms, excluding banks, credit card companies, and insurance companies.\


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