Debt Developments in the Nonfinancial Private Sector, First Quarter of 2021
- In the first quarter of 2021, there was an increase of about NIS 28 billion (2.8 percent) in the balance of business sector debt, due mostly to increases in the balance of debt raised abroad and in outstanding bank debt.
- The balance of households’ housing debt continued to increase in the first quarter, growing by about NIS 9 billion (2.2 percent).
- The balance of nonhousing debt increased by about NIS 2 billion (1.1 percent) in the first quarter, following declines during most of 2020 against the background of the COVID-19 crisis.
The nonfinancial business sector’s outstanding debt
- In the first quarter of 2021, the balance of business sector debt increased by approximately NIS 28 billion (2.8 percent), to about NIS 1 trillion. The increase derived from net debt raised, which totaled about NIS 20 billion and was mainly comprised of bank loans and debt raised abroad through bonds. A depreciation of the shekel by about 3.7 percent also contributed to the increase in the value of debt denominated in and indexed to foreign exchange. These effects led to an increase in the annual rate of change of nonbank debt to about 5 percent during the quarter, similar to the annual rate of change in bank debt (Figures 1 and 2).
- In the first quarter of 2021, the business sector issued about NIS 10 billion in bonds, similar to the average quarterly amount raised in the previous four quarters. Companies in the construction and real estate industry continue to lead the issuances, as they carried out half of issues in the first quarter.
- In April 2021, the business sector issued bonds worth about NIS 5 billion (Figure 3).
- In the first quarter, the spread between yields on corporate bonds that are included in the Tel Bond 60 Index, and the yields on CPI-indexed government bonds continued to narrow, by about 0.1 percentage points. This followed the significant widening in the first quarter of 2020, mostly in March, in view of the COVID-19 crisis. In April–May 2021, the spread continued to narrow, to about 1.01 percentage points (Figure 4).
- Households’ outstanding debt increased by about NIS 11 billion (1.9 percent) in the first quarter of 2021, to about NIS 622 billion. Most of the increase was in outstanding housing debt. Nonhousing debt increased by about 1.1 percent, to about NIS 196 billion, after declining in most of 2020 in view of the COVID-19 crisis (Figure 5).
- In the first quarter of 2021, there was a total of about NIS 22 billion in new mortgages taken out, slightly higher than the corresponding period of 2020 (about NIS 21 billion). In April–May 2021, there was an increase in new mortgages taken out, to an average of about NIS 9 billion per month (Figure 6).
 Israeli firms, excluding banks, credit card companies, and insurance companies.
 The change in the spread from one quarter to the next is calculated as the difference between the average spread in the final month of the reviewed quarter and the average spread in the final month of the previous quarter.