Bigger, faster Israel Bonds

NEW YORK, March 20 (JTA) — State of Israel Bonds, which in November suddenly cut its workforce by 20 percent and closed three offices to erase a budget deficit, now plans to add staff and offices as part of its largest reorganization ever — one that has eliminated the familiar $500 and $1,000 bonds. Since March 1, the smallest denomination bond continues to be the $100 Mazel Tov bond that matures in five years, but the next largest amount is now $2,500. It matures in either two or 10 years. In addition, Bonds has eliminated the zero coupon bond and modified its Jubilee series bonds — those that sell for a minimum of $25,000. They now mature in two, five, seven or 10 years. Joshua Matza, Israel Bonds’ president and CEO, said the staffing changes will come late next year as the organization responds to an Israeli government request to begin to raising half of Israel’s overseas borrowing needs by 2008. Matza said that Ehud Olmert, Israel’s interim prime minister and finance minister, told him last October that those needs are expected to be $3 billion in 2008 and that Israel Bonds would be asked to raise $1.5 billion of that. This year it has been asked to raise $1 billion. Because the organization would be raising so much more money in two years, Matza said its overhead costs would be smaller in 2008. “I could then afford to open more offices or to strengthen some offices,” he said. He said he did not know how many offices would open, nor if Israel Bonds’ Long Island, New York, office, which was closed last year, would be re-opened. But Matza said the Long Island operation “would be strengthened.” It is currently operated out of Manhattan. Matza said the introduction of bonds that mature in two years instead of 10 is in response to investors’ desires. “People today like to invest for a short time, not for a long, long time.”