Obligation Israëli 4% ( US46513AGA25 ) en USD

Société émettrice Israëli
Prix sur le marché 100 %  ▼ 
Pays  Israel
Code ISIN  US46513AGA25 ( en USD )
Coupon 4% par an ( paiement semestriel )
Echéance 30/06/2022 - Obligation échue



Prospectus brochure de l'obligation Israel US46513AGA25 en USD 4%, échue


Montant Minimal 200 000 USD
Montant de l'émission 1 500 000 000 USD
Cusip 46513AGA2
Description détaillée Israël est une nation du Moyen-Orient située sur la côte orientale de la mer Méditerranée, connue pour son histoire riche, sa diversité culturelle et son rôle géopolitique important.

L'Obligation émise par Israëli ( Israel ) , en USD, avec le code ISIN US46513AGA25, paye un coupon de 4% par an.
Le paiement des coupons est semestriel et la maturité de l'Obligation est le 30/06/2022







This Prospectus Supplement should be read in conjunction with
the Prospectus dated February 11, 2009.
$1,500,000,000
State of Israel
4.00% Bonds due June 30, 2022
This is an offering by the State of Israel of an aggregate of $1,500,000,000 4.00% bonds due June 30, 2022 (the
"bonds"). The bonds will constitute the direct, general and unconditional obligations of the State of Israel. The full faith and
credit of Israel will be pledged for the due and punctual payment of all principal and interest on the bonds.
Interest on the bonds will be payable semi-annually on June 30 and December 30 of each year, beginning on June 30,
2012. The bonds will be issued only in denominations of $200,000 and integral multiples of $1,000 above that amount.
This prospectus supplement and accompanying prospectus dated February 11, 2009, constitute a prospectus for the
purposes of Article 5.3 of Directive 2003/71/EC, as amended (the "Prospectus Directive").
Application will be made to the Commission de Surveillance du Secteur Financier of the Grand Duchy of Luxembourg
(the "CSSF"), as competent authority under the Prospectus Directive, to approve this Prospectus Supplement and the
accompanying prospectus dated February 11, 2009 as a prospectus for the purposes of the Prospectus Directive. The CSSF
assumes no responsibility as to the economic and financial soundness of the transaction or the solvency of the State of Israel.
Application will be made to list the bonds on the official list of the Luxembourg Stock Exchange and to have the bonds
admitted to trading on the regulated market "Bourse de Luxembourg" of the Luxembourg Stock Exchange, which is a
regulated market for the purposes of the Market in Financial Instruments Directive (2004/39/EC).
See the section entitled "Risk Factors" beginning on page S-7 for a discussion of certain factors you should
consider before investing in the bonds.
The bonds will be designated Collective Action Securities and, as such, will contain provisions regarding meetings of
holders, acceleration of the bonds in an event of default and future modifications to the terms of the bonds that differ from
those applicable to much of Israel's outstanding public external indebtedness. Under these provisions, which are described in
the sections entitled "Debt Securities -- Default" beginning on page 6 of the accompanying prospectus and "Collective
Action Securities" beginning on page 9 of the accompanying prospectus, Israel may amend the payment provisions of the
bonds, including the principal amount and interest rate, and take certain other actions, in each case with the consent of the
holders of 75% of the aggregate principal amount of the outstanding bonds.
Per
Bond
Total
Public Offering Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
99.036%
$1,485,540,000
Underwriting discounts and commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.125%
$
1,875,000
Proceeds to the State of Israel (before expenses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
98.911%
$1,483,665,000
The public offering price set forth above does not include accrued interest, if any. Interest on the bonds will accrue from
January 30, 2012 and must be paid by the purchaser if the bonds are delivered after January 30, 2012.
Neither the Securities and Exchange Commission (the "SEC") nor any regulatory body in the United States has
approved or disapproved of these securities or passed upon the accuracy of this prospectus supplement or the
accompanying prospectus. Any representation to the contrary is a criminal offense.
The bonds were delivered on or about January 30, 2012 (the "issue date") in book-entry form only to purchasers through
The Depository Trust Company, Clearstream Banking, Luxembourg, société anonyme, and the Euroclear System.
Joint Book-Running Managers
Barclays Capital
Goldman, Sachs & Co.
UBS Investment Bank
Co-Managers
Citi
Deutsche Bank Securities
Prospectus Supplement dated February 21, 2012


TABLE OF CONTENTS
Page
Prospectus Supplement
NIS Exchange Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S-2
Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S-2
Official Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S-2
About this Prospectus Supplement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S-3
Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S-4
Summary of the Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S-5
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S-7
Incorporation by Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S-10
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S-11
Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S-12
Description of the Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S-17
Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S-24
Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S-30
Stabilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S-31
Offering Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S-31
Listing, Admission to Trading and General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S-33
Validity of the Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S-35
Incorporation by Reference Cross-Reference Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S-36
Prospectus
Where You Can Find More Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
Debt Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
Collective Action Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12
Official Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13
Validity of the Debt Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13
Authorized Representative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13
S-1


NIS EXCHANGE RATES
On February 20, 2012, the Bank of Israel foreign exchange rate for U.S. dollars was 3.725 New Israeli
Shekels, or NIS, per U.S. dollar. References to dollar, "US$" or "$" in this prospectus supplement are to U.S.
dollars and references to "NIS" or "shekel" are to New Israeli Shekels. For a discussion of the convertibility of
the NIS, see "Currency Protocol" and "Balance of Payments and Foreign Trade -- Foreign Exchange Controls
and International Reserves" in Exhibit D to Israel's Annual Report on Form 18-K for the fiscal year ended
December 31, 2010, as amended.
FISCAL YEAR
The fiscal year of the Government of Israel (the "Government") ends December 31. The twelve-month
period which ended on December 31, 2010 is referred to herein as "2010", and other years are referred to in a
similar manner.
OFFICIAL STATEMENTS
Information included in this prospectus supplement and the accompanying prospectus, including the
documents incorporated by reference in this prospectus supplement, relating to the bonds that is identified as
being derived from a publication of Israel or one of its agencies or instrumentalities or the Bank of Israel is
included on the authority of that publication as a public official document of Israel or the Bank of Israel. All
other information in this prospectus supplement, the accompanying prospectus and in the registration statement,
other than the information included under the caption "Underwriting", is included as a public official statement
made on the authority of the Director General of the Ministry of Finance of Israel, in his official capacity.
S-2


ABOUT THIS PROSPECTUS SUPPLEMENT
Israel accepts responsibility for the contents of this prospectus supplement and the accompanying
prospectus, including the documents incorporated by reference in this prospectus supplement. Israel further
declares that, having taken all reasonable care to ensure that such is the case, the information contained in this
prospectus supplement and the accompanying prospectus is, to the best of its knowledge, in accordance with the
facts and contains no omission likely to affect its import.
A Description of the State of Israel is contained in Exhibit D to the Annual Report of the State of Israel on
Form 18-K for the fiscal year ended December 31, 2010, as amended. Such Annual Report on Form 18-K for the
year ended December 31, 2010 (including its exhibits), as amended, is incorporated by reference in this
prospectus supplement. There have been no material adverse changes that would affect the information about the
State of Israel included in the Description of the State of Israel contained in such Exhibit D.
Prospective investors should rely on the information provided in this prospectus supplement, the
accompanying prospectus and the documents incorporated by reference in this prospectus supplement. No person
is authorized to make any representation or give any information not contained in this prospectus supplement, the
accompanying prospectus or the documents incorporated by reference in this prospectus supplement. Any such
representation or information not contained in this prospectus supplement, the accompanying prospectus or the
documents incorporated by reference in this prospectus supplement must not be relied upon as having been
authorized by Israel or the underwriters. Please see "Incorporation by Reference" and "Listing, Admission to
Trading and General Information -- Where You Can Find More Information" for information on the documents
that are incorporated by reference in this prospectus supplement.
Israel is not offering to sell or soliciting offers to buy any securities other than the bonds offered under this
prospectus supplement, nor is Israel offering to sell or soliciting offers to buy the bonds in places where such
offers are not permitted by applicable law. You should not assume that the information in this prospectus
supplement or the accompanying prospectus, or the information Israel has previously filed with the SEC, and
incorporated by reference in this prospectus supplement, is accurate as of any date other than their respective
dates. Israel's economic, fiscal or political circumstances may have changed since such dates.
The bonds described in this prospectus supplement are debt securities of Israel being offered under a
registration statement filed with the SEC under the U.S. Securities Act of 1933, as amended. The accompanying
prospectus is part of that registration statement. The accompanying prospectus provides you with a general
description of the securities that Israel may offer, and this prospectus supplement contains specific information
about the terms of this offering and the bonds. This prospectus supplement also adds, updates or changes
information provided in the accompanying prospectus. Consequently, before you invest, you should read this
prospectus supplement together with the accompanying prospectus as well as the documents incorporated by
reference in this prospectus supplement. See "Incorporation by Reference" and "Listing, Admission to Trading
and General Information -- Where You Can Find More Information" for information on the documents that are
incorporated by reference in this prospectus supplement. Those documents (such as Israel's Annual Report on
Form 18-K for 2010, as amended), contain information regarding Israel, the bonds and other matters. The
registration statement, any post-effective amendments thereto, and the various exhibits thereto contain additional
information about Israel and the bonds. Certain terms used but not defined in this prospectus supplement are
defined in the accompanying prospectus.
The distribution of this prospectus supplement and the accompanying prospectus and the offering of the
bonds in certain jurisdictions may be restricted by law. Persons who receive copies of this prospectus supplement
and the accompanying prospectus should inform themselves about and observe any of those restrictions. See
"Underwriting" in this prospectus supplement.
S-3


This prospectus supplement and the accompanying prospectus, including the documents incorporated by
reference in this prospectus supplement, may be used only for the purposes for which they have been produced in
connection with the offering of the bonds. Any use of this prospectus supplement and the accompanying
prospectus, including the documents incorporated by reference in this prospectus supplement, other than in
connection with the offering of the bonds, is unauthorized.
FORWARD-LOOKING STATEMENTS
Israel has made forward-looking statements in this prospectus supplement and the accompanying
prospectus, including the documents incorporated by reference in this prospectus supplement. Statements that are
not historical facts are forward-looking statements. Forward-looking statements generally can be identified by the
use of forward-looking terminology such as "may", "will", "expect", "intend", "estimate", "anticipate",
"believe", "continue", "could", "should", "would" or similar terminology. Any forward-looking statements in
this prospectus supplement and the accompanying prospectus, including the documents incorporated by reference
in this prospectus supplement, are based on Israel's current plans, estimates, assumptions and projections.
Therefore, you should not place undue reliance on them. Forward-looking statements speak only as of the date
they are made, and Israel undertakes no obligation to update any of them in light of new information or future
events.
Forward-looking statements involve inherent risks. Israel cautions you that many factors could affect the
future performance of the Israeli economy. These factors include, but are not limited to:
· External factors, such as:
· interest rates in financial markets outside Israel;
· the impact of changes in the credit rating of Israel;
· the security situation;
· the economic growth and stability of Israel's major trading partners, including the United States and
the European Union;
· the global high-tech market; and
· regional economic and political conditions.
· Internal factors, such as:
· general economic and business conditions in Israel;
· present and future exchange rates of the Israeli currency;
· foreign currency reserves;
· the level of domestic debt;
· domestic inflation;
· the level of budget deficit;
· the level of foreign direct and portfolio investment; and
· the level of Israeli domestic interest rates.
S-4


SUMMARY OF THE OFFERING
The following summary should be read as an introduction to this prospectus supplement and is qualified in
its entirety by, and should be read in conjunction with, the more detailed information appearing elsewhere in this
prospectus supplement and the accompanying prospectus. You should base any decision to invest in the bonds on
consideration of this prospectus supplement and the accompanying prospectus, including the documents
incorporated by reference in this prospectus supplement, as a whole.
Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . State of Israel.
Title of Security . . . . . . . . . . . . . . . . . . . 4.00% bonds due June 30, 2022.
Aggregate Principal Amount . . . . . . . . US$1,500,000,000.
Maturity Date . . . . . . . . . . . . . . . . . . . . June 30, 2022.
Interest Rate . . . . . . . . . . . . . . . . . . . . . . 4.00% per annum.
Interest Payment Dates . . . . . . . . . . . . . June 30 and December 30 of each year, starting June 30, 2012.
Price to Public . . . . . . . . . . . . . . . . . . . . 99.036% of the principal amount.
Form
. . . . . . . . . . . . . . . . . . . . . . . . . . . Israel will issue the bonds in the form of one or more book-entry
securities in fully registered form, without coupons. Israel will not
issue the bonds in bearer form.
Denominations
. . . . . . . . . . . . . . . . . . . Israel will issue the bonds in denominations of US$200,000 and
integral multiples of US$1,000 above that amount.
Payment of Principal and Interest . . . . Principal and interest on the bonds will be payable in U.S. dollars or
other legal tender, coin or currency of the United States of America.
Status . . . . . . . . . . . . . . . . . . . . . . . . . . . The bonds will rank equal in right of payment with all of Israel's
existing and future unsecured and unsubordinated external
indebtedness.
Redemption; Sinking Fund . . . . . . . . . The bonds will not be redeemable prior to maturity and are not
entitled to the benefit of any sinking fund.
Default . . . . . . . . . . . . . . . . . . . . . . . . . . The bonds will contain events of default, the occurrence of which
may result in the acceleration of Israel's obligations under the bonds
prior to maturity upon notice by holders of at least 25% of the
aggregate principal amount of the outstanding bonds. See "Debt
Securities -- Default" and "Collective Action Securities
-- Acceleration of Maturity" in the accompanying prospectus.
Risk Factors
. . . . . . . . . . . . . . . . . . . . . There are certain risks relating to the issue of the bonds, which
investors should ensure they fully understand. See "Risk Factors".
Collective Action Clauses . . . . . . . . . . . The bonds will be designated Collective Action Securities and, as
such, will contain provisions regarding meetings of holders,
acceleration of the bonds in an event of default and future
modifications to the terms of the bonds that differ from those
applicable to much of Israel's outstanding public external
indebtedness. Under these provisions, which are described in the
sections entitled "Debt Securities -- Default" and "Collective Action
Securities" in the accompanying prospectus, Israel may amend the
payment provisions of the bonds (including their principal amount,
interest rate, currency of payment and payment dates) and take certain
other actions, in each case with the consent of the holders of 75% of
S-5


the aggregate principal amount of the outstanding bonds. Certain of
these actions may be taxable events requiring holders to recognize
gain or loss for U.S. federal income tax purposes. See "Taxation
-- United States" in this prospectus supplement.
Listing and Listing Agent . . . . . . . . . . . Application will be made to list the bonds on the official list of the
Luxembourg Stock Exchange. It is expected that the Luxembourg
listing agent will be Dexia Banque Internationale à Luxembourg,
société anonyme.
Fiscal Agent . . . . . . . . . . . . . . . . . . . . . . The bonds will be issued pursuant to a fiscal agency agreement, dated
as of March 13, 2000, as amended by Amendment No. 1 to Fiscal
Agency Agreement dated as of February 24, 2004, between Israel and
Citibank, N.A., as fiscal agent, paying agent, transfer agent and
registrar.
Taxation . . . . . . . . . . . . . . . . . . . . . . . . . For a discussion of the Israeli and United States tax consequences
associated with the bonds, see "Taxation" in this prospectus
supplement and "Debt Securities -- Taxation by Israel; Additional
Amounts" in the accompanying prospectus. Investors should consult
their own tax advisors in determining the foreign, United States
federal, state, local and any other tax consequences to them of the
purchase, ownership and disposition of the bonds.
Further Issues . . . . . . . . . . . . . . . . . . . . From time to time, without the consent of holders of the bonds, and
subject to the required approvals under Israeli law, Israel may create
and issue additional debt securities with the same terms and
conditions as those of the bonds (or the same except for the amount of
the first interest payment and the issue price), provided that such
additional debt securities, for purposes of U.S. federal income
taxation (a) are treated as having the same tax characteristics as the
bonds, and (b) do not have a greater amount of original issue discount
than the bonds have as of the date of issuance of such additional debt
securities. See "Collective Action Securities -- Further Issues of Debt
Securities of a Series" in the accompanying prospectus.
Governing Law . . . . . . . . . . . . . . . . . . . The bonds will be governed by the laws of the State of New York,
except with respect to the authorization and execution of the bonds,
which will be governed by the laws of the State of Israel.
Where a claim relating to the information contained in this prospectus supplement or the accompanying
prospectus is brought before a court, the plaintiff investor might, under the national legislation of the place of
jurisdiction, have to bear the costs of translating this prospectus supplement and the accompanying prospectus
before the legal proceedings are initiated.
S-6


RISK FACTORS
You should read this entire prospectus supplement, the accompanying prospectus and the documents
incorporated by reference herein carefully. Words and expressions defined elsewhere in this prospectus
supplement, and the accompanying prospectus have the same meaning in this section. Investing in the bonds
involves certain risks. Factors which are material for assessing the market risks associated with the bonds are
described below. You should consult with your financial, tax, legal, accounting and other advisors, prior to
deciding whether to make an investment in the bonds.
Risks related to the bonds
The bonds may not be a suitable investment for all investors.
You must determine the suitability of investment in the bonds in the light of your own circumstances. In
particular, you should:
(i)
have sufficient knowledge and experience to make a meaningful evaluation of the bonds and the merits
and risks of investing in the bonds;
(ii) have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of your
particular financial situation, an investment in the bonds and the impact the bonds will have on your
overall investment portfolio;
(iii) have sufficient financial resources and liquidity to bear all of the risks of an investment in the bonds,
including where the currency for principal or interest payments is different from your currency;
(iv) understand thoroughly the terms of the bonds and be familiar with the behavior of any relevant indices
and financial markets; and
(v) be able to evaluate (either alone or with the help of a financial advisor) possible scenarios for
economic, interest rate and other factors that may affect your investment and your ability to bear the
applicable risks.
There is no assurance that an active secondary market for the bonds will develop.
The bonds are new securities for which there currently is no public market. There can be no assurance that
an active trading market for the bonds will develop, or, if one does develop, that it will be maintained. If an
active trading market for the bonds does not develop or is not maintained, the market or trading price and
liquidity of the bonds may be adversely affected. If the bonds are traded after their initial issuance, they may
trade at a discount to their initial offering price, depending upon prevailing interest rates, the market for similar
securities, recommendations from securities analysts, general economic conditions and the financial condition of
the State of Israel. Although an application will be made to list and trade the bonds on the Regulated Market
"Bourse de Luxembourg" of the Luxembourg Stock Exchange, there is no assurance that such application will be
accepted or that an active trading market will develop.
The bonds contain provisions that permit Israel to amend the payment terms without the consent of all
holders.
The bonds contain provisions regarding acceleration and voting on amendments, modifications, changes and
waivers, which are commonly referred to as "collective action clauses". Under these provisions, certain key
provisions of the bonds may be amended, including the maturity date, interest rate and other payment terms, with
the consent of the holders of 75% of the aggregate principal amount of the outstanding bonds. See "Debt
Securities -- Default" and "Collective Action Securities" in the accompanying prospectus.
There can be no assurance that the laws of the State of New York in effect as of the date of this prospectus will
not be modified.
The conditions of the bonds are based on the laws of the State of New York in effect as of the date of this
prospectus supplement. No assurance can be given as to the impact of any possible judicial decision or change to
New York law or administrative practice after the date of this prospectus supplement.
S-7


Legal investment considerations may restrict certain investments.
The investment activities of certain investors are subject to legal investment laws and regulations, or review
or regulation by certain authorities. You should consult your legal advisors to determine whether and to what
extent (i) the bonds are legal investments for you, (ii) the bonds can be used as collateral for various types of
borrowing and (iii) other restrictions apply to your purchase or pledge of any bonds. Financial institutions should
consult their legal advisors or the appropriate regulators to determine the appropriate treatment of the bonds
under any applicable risk-based capital or similar rules.
The trading market for debt securities may be volatile and may be adversely impacted by many events.
The market for the bonds issued by the State of Israel is influenced by economic and market conditions and,
to varying degrees, interest rates, currency exchange rates and inflation rates in the United States and Europe and
other industrialized countries. There can be no assurance that events in Israel, the United States, Europe or
elsewhere will not cause market volatility or that such volatility will not adversely affect the price of the bonds or
that economic and market conditions will not have any other adverse effect.
Investors in the bonds may be subject to interest rate risks.
Investment in fixed rate bonds involves the risk that subsequent changes in market interest rates may
adversely affect the value of the fixed rate bonds.
The bonds are unsecured.
The bonds constitute unsecured obligations of the State of Israel.
Risks related to the State of Israel and the geopolitical and economic environment
There can be no assurance that Israel's credit rating will not change.
Long-term debt of the State of Israel is currently rated `A+' by Standard and Poor's, `A' by Fitch Ratings
and `A1' by Moody's. A security rating is not a recommendation to buy, sell or hold securities and may be
subject to suspension, reduction or withdrawal at any time by the assigning rating agency. Any adverse change in
an applicable credit rating could adversely affect the trading price for the bonds and has the potential to affect
Israel's cost of funds in the international capital markets and the liquidity of and demand for Israel's debt
securities.
Israel's political, economic and military environment may continue to be volatile.
Israel has from time to time experienced political volatility and has been subject to ongoing security
concerns. Since the establishment of the State of Israel in 1948, a number of armed conflicts have occurred
between Israel and its Arab neighbors. Political instability in the Middle East has increased since the terrorist
attacks of September 11, 2001, the U.S. intervention in Iraq and news of Iran's reported nuclear program. Since
2005, when Israel withdrew from the Gaza strip, terrorist violence in Israel has increased. If the level of
instability and violence increases in the future, Israel's capital markets, the level of tourism in Israel and foreign
investment in Israel, among other things, may suffer. The conflicts with the Hamas-led Palestinian Authority and
with the Hezbollah in Lebanon may worsen and potentially affect Israel's economic condition. In addition,
political volatility may affect the stability of the Israeli economy.
Since January 2011, there have been varying degrees of political instability and public protests within
Middle Eastern countries including (without limitation) Bahrain, Egypt, Libya, Syria, Tunisia and Yemen.
Although such instances of instability in the Middle East have not so far materially affected Israel's financial or
political situation as of the date of this prospectus supplement, there can be no assurance that such instability in
the Middle East will not escalate in the future, that such instability will not spread to additional countries in the
Middle East or that governments in the Middle East will be successful in maintaining domestic order and
stability, or that Israel's financial or political situation will not thereby be affected.
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Israel is a foreign sovereign state and accordingly it may be difficult to obtain or enforce judgments against it.
Israel is a sovereign state. Although Israel has waived its sovereign immunity in respect of the bonds, except
for its sovereign immunity in connection with any actions arising out of or based on United States federal or state
securities laws, enforcement in the event of a default may nevertheless be impracticable by virtue of legal,
commercial, political or other considerations.
Because Israel has not waived its sovereign immunity in connection with any action arising out of or based
on United States federal or state securities laws, it will not be possible to obtain a United States judgment against
Israel based on such laws unless a court were to determine that Israel is not entitled under the United States
Foreign Sovereign Immunities Act of 1976, as amended, to sovereign immunity with respect to such actions.
The current global financial crisis and continued economic disruption may have an adverse effect on Israel's
economy.
Israel's economy is affected by global economic conditions, including regional and international rates of
economic growth. Recent downturns in the global economy have led to increased market volatility, decreased
consumer confidence and a widespread reduction of business activity generally. The potential impact of such
global economic pressure on Israel and Israeli securities is uncertain. Although Israel's economy has shown
moderate rates of growth throughout the recent global financial crisis, there can be no assurance that Israel's
economy will continue to grow in a prolonged negative global economic climate. Moreover, a worsening of
global economic conditions would likely exacerbate any potential adverse effects these difficult economic
conditions may have on Israel's economy and may ultimately have a negative impact on Israel's financial
condition and credit. In particular, the global financial crisis may have adverse effects on Israel, including with
respect to: (i) losses by, or reduced income of, the industries associated with tourism within Israel and export-
oriented goods and services; and (ii) a general slowdown in economic activity in Israel, which may impact Israeli
banks' assets and profitability and which would in turn impact their ability to finance Israeli companies.
The global financial crisis has contributed to the failures of financial institutions in the United States and
Europe and unprecedented action by governmental authorities, with some European Union members
experiencing difficulties with refinancing their debt obligations and maintaining liquidity with respect to their
public finances. As a result, there is significant price volatility in the secondary market for sovereign debt, which
could lead to a decline in the recoverability and value of the market price of the bonds. In addition, if there is a
significant decline in the economic growth of any of Israel's major trading partners, including the United States
and the European Union and its members, or any euro area member experiences difficulties issuing securities in
the sovereign debt market or servicing existing debt, it could have a material adverse impact on Israel's balance
of trade and adversely affect Israel's financial condition, including the value of the bonds.
The successful development of Israel's natural gas reserves involves certain risks that may make expected
natural gas production levels unobtainable.
There are numerous uncertainties associated with estimating quantities of natural gas reserves and
projecting future rates of production and the level of revenue Israel will recover from its natural gas fields. These
items are, in part, dependent on the reliability of seismic measurement technologies, the future international
market for natural gas and other energy substitutes, as well as future development and operating costs, all of
which may in fact vary considerably from Israel's current assumptions concerning royalties and tax revenues.
Moreover, certain of Israel's neighboring countries have asserted mineral rights with respect to certain natural
gas reserves to which Israel currently lays claim. Any failure to meet expected natural gas production targets on
the forecasted timelines, or at all, could have a negative impact on Israel's progress towards energy independence
or the revenues that will be received by the State of Israel.
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