Debt Developments in the Economy, September–October 2013
Business sector debt declined by 0.7 percent, to around NIS 786 billion, in September. Household debt increased by about NIS 0.8 billion (0.2 percent) to around NIS 403 billion at the end of the month.
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The business sector’s outstanding debt
- The total outstanding debt of the business sector declined by about NIS 5.4 billion (0.7 percent) to around NIS 786 billion in September. The decline derived primarily from the appreciation of the shekel against the dollar. The rest of the decline derived from about NIS 0.3 billion in net repayment of debts—repayments of about NIS 2.1 billion in tradable bonds and loans from nonresidents were partially offset by about NIS 1.8 billion in funds raised through loans from banks and institutional investors.
- In October, the business sector (excluding banks and insurance companies) issued about NIS 3.7 billion in bonds, most of which were tradable bonds. This is greater than the monthly average for the year to date, of about NIS 2.5 billion.
In October, there were about NIS 4.4 billion in new mortgages taken out—similar to the monthly average since the beginning of the year, of about NIS 4.3 billion.
The cost of the debt
- In September, the yield spread in the unindexed track remained essentially unchanged vis-à-vis the previous month, at 3.35 percentage points.
- In the CPI-indexed track, the spread between the interest rate on new bank credit granted and the interest rate on deposits increased in September by about 0.23 percentage points, due to an increase in the interest rate on credit.
- In September, the spread between the yield on indexed corporate bonds—measured by the Tel Bond 60—and average yields on indexed government bonds was 1.17 percentage points, lower than the spread in August which was around 1.44 percentage points. Since October 2012, the spread has narrowed by abound 0.6 percentage points.
- In October, the average interest rate on new unindexed mortgages declined by around 0.23 percentage points, due to the reduction in the Bank of Israel interest rate.
- The interest rate on new CPI-indexed mortgages increased by around 0.35 percentage points.
For links to Data and Statistics on the Bank of Israel website: