The first public issue for Israel underwritten by a major British financial house and involving a flow of investment funds totaling 18,800,-000 Israeli pounds ($6,267,000) was announced today by Sir Isaac Wolfson, British industrialist and benefactor of Israel.
Calling the financing a “breakthrough,” Sir Isaac told a press conference that the flotation is for an issue of the Wolfson-Clore-Mayer Corporation of Israel which will be underwritten by Philip Hill and Partners, a major firm of the City, the London financial center.
The flotation includes loans totaling $5,000,000 at 6-1/2 per cent interest redeemable from 1969 to 1988. In addition another 3,800,000 Israeli pounds in equity stock will be taken up by the corporation to release a previous loan to the Tel Aviv Municipality so that the funds can be used for other purposes.
Sir Isaac said that while long-term loans to Israel have been made before in Britain, this is the first time that a public issue has been underwritten by a major London financial house which can be fairly said to reflect the mood of the financial district. He added that “it speaks for the confidence” in Israel that the loan extends over a period of 25 years.
Sir Isaac explained that out of the total transaction, 6,000,000 Israeli pounds ($2,000,000) will be placed at the disposal of a Jerusalem bank which is providing low interest mortgages for working people. The rest will be invested in industries, mainly electronics, and only part of it in property development. This is a new departure for the corporation’s operations in Israel, he added.
The British industrialist also pointed out that such transactions are done with the consent of the British Treasury and they reflect the confidence of the Treasury in Israel. He added that in terms of normal finance, both he and Mr. Clore, a Jewish financier, might have found more profitable outlets for the money but that, in this case that was not their only consideration. In arranging the transaction, he said, the two financiers kept in mind its usefulness to Israel and its contribution to the economic progress of Israel.
He added that both men were well aware that they were on the Arab boycott list but, he said, “we are quite happy and not in the least worried about being on that list.”
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