Another vote of confidence from international: Bank Leumi Completes Overseas CoCo Bond Issuance totaling USD 1 Billion - in the lowest spread in the history of an Israeli bank issuance ‎

Rhea-AI Summary

Bank Leumi (BLMIF) completed an international CoCo bond issuance totaling USD 1 billion, attracting about USD 2.5 billion in demand. The 10.25-year subordinated notes, callable after 5 years, carry 5.7% interest and a 155 bps spread, the lowest ever for an Israeli bank CoCo issued overseas.

The deal aims to diversify funding and strengthen capital, with listing expected on the Tel Aviv Stock Exchange institutional system. In January 2026, Leumi also raised a EUR 750 million mortgage-backed covered bond from foreign investors at significantly lower financing costs than regular corporate bonds.

Positive

• USD 1 billion CoCo issuance completed with demand around USD 2.5 billion
• Record-low 155 bps spread for an Israeli bank CoCo issued overseas
• 10.25-year subordinated notes expected to strengthen regulatory capital base
• Funding diversification via international institutional investors and TASE listing
• EUR 750 million covered bond raised in January 2026 at lower financing costs
• Covered bond ratings 2–4 notches above prior State of Israel bond issuance

Negative

• None.

News Market Reaction – BLMIF

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TEL AVIV, Israel, June 3, 2026 /PRNewswire/ -- Bank Leumi (TASE: LUMI) announced today that it has successfully completed an international issuance of CoCo bonds from a range of institutional investors abroad and in Israel, in an amount totaling USD 1 billion. During the offering, exceptionally strong demand was recorded, totaling approximately USD 2.5 billion.

A CoCo bond issuance, through the issuance of subordinated capital notes (Subordinated Debt), is a financial instrument that combines characteristics of both debt and equity, and is considered subordinated debt that strengthens the Bank's capital base. As part of the current transaction, a bond series was issued for a term of 10.25 years, with a call option after 5 years, at an interest rate of 5.7% and a spread of 155 basis points. This is the lowest spread in the history of an Israeli bank issuance of CoCo bonds overseas, reflecting significant confidence in Bank Leumi and in the Israeli economy. ‎

The transaction, led by Omer Ziv, Deputy CEO and Head of the Bank's Capital Markets Division, was carried out against the backdrop of the Bank's continuing growth trend, with the aim of diversifying its funding sources and strengthening its capital. The issuance was led by some of the world's leading investment banks: Goldman Sachs, J.P. Morgan, Citibank, Deutsche Bank, Morgan Stanley, and others. The series is expected to be listed on the institutional trading system of the Tel Aviv Stock Exchange. ‎

In January 2026, Leumi was the first financial institution in Israel to raise a mortgage-backed covered bond from foreign investors — an innovative debt instrument with financing costs significantly lower than those of a regular corporate bond. The issuance amounted to approximately EUR 750 million, received ratings that were 2 to 4 notches higher than the rating assigned to bonds issued by the State of Israel in a previous issuance, and at an interest rate approximately 20 basis points lower. ‎

 

View original content:https://www.prnewswire.com/news-releases/another-vote-of-confidence-from-international-bank-leumi-completes-overseas-coco-bond-issuance-totaling-usd-1-billion--in-the-lowest-spread-in-the-history-of-an-israeli-bank-issuance--302789615.html

SOURCE Bank Leumi

FAQ

What did Bank Leumi (BLMIF) announce on June 3, 2026 about its CoCo bond issuance?

Bank Leumi announced completion of a USD 1 billion international CoCo bond issuance. According to Bank Leumi, demand reached about USD 2.5 billion, indicating strong interest from institutional investors abroad and in Israel and supporting the bank’s capital and funding diversification goals.

What are the key terms of Bank Leumi’s 2026 CoCo bonds for BLMIF investors?

The CoCo bonds have a 10.25-year term, callable after 5 years, with 5.7% interest. According to Bank Leumi, the spread is 155 basis points, described as the lowest for any Israeli bank CoCo bond issued overseas, signaling strong market confidence.

How does the 2026 CoCo bond issuance affect Bank Leumi’s capital and funding?

The CoCo issuance is intended to strengthen Bank Leumi’s capital base and diversify funding sources. According to Bank Leumi, these subordinated capital notes combine debt and equity features and are expected to be listed on the Tel Aviv Stock Exchange institutional trading system.

Why is the 155 bps spread on Bank Leumi’s 2026 CoCo bonds important for BLMIF shareholders?

The 155 bps spread represents the lowest ever for an Israeli bank CoCo issued overseas. According to Bank Leumi, this pricing reflects significant confidence in the bank and the Israeli economy, potentially signaling favorable market perception of its credit quality and risk profile.

What previous international debt transaction did Bank Leumi complete in January 2026?

In January 2026, Bank Leumi raised a EUR 750 million mortgage-backed covered bond from foreign investors. According to Bank Leumi, this innovative instrument had significantly lower financing costs than regular corporate bonds and carried ratings 2 to 4 notches above prior State of Israel bonds.

Which banks led Bank Leumi’s June 2026 USD 1 billion CoCo bond issuance?

Global investment banks including Goldman Sachs, J.P. Morgan, Citibank, Deutsche Bank, Morgan Stanley and others led the issuance. According to Bank Leumi, these leading underwriters supported placement with a broad range of international institutional investors, helping achieve strong demand and record-low spread levels.