Michael Frerichs, treasurer of Illinois, announced a renewed $10 million investment from the Land of Lincoln in Israel Bonds on Thursday.
The announcement, which came six paragraphs into a press release about the state purchasing $50 million in Republic of Poland Bonds, stated that the five-year renewal of the Israel Bonds comes at a 6.17% interest rate, “the highest in the last 25 years.”
“The rate outpaces the U.S. Treasury Note by about 124 basis points (1.24%) and will earn $620,000 more for the state compared to five-year U.S. Treasuries,” Frerichs stated.
The state’s two purchases in Polish bonds come at lower rates. “One is for $25 million for four years at 4.875%, and the second is for $25 million for five years at 4.625%,” the treasurer said. Those outpaced U.S. Treasury Notes “by about 46 basis points and will earn $250,000 more for the state,” his office said.
“Every investment we make must serve the people of Illinois,” Frerichs stated. “As treasurer, my responsibility is to protect taxpayers’ money, maintain a stable and diversified portfolio and earn the best returns possible in accordance with state law.”
“Those returns help grow public funds that can support the services Illinois families rely on,” he said. “Our decision was based on an assessment of the bonds as a stable, safe and high-performing investment.”
“Israel Bonds have consistently generated among the highest returns in the state portfolio for two decades,” he stated.
The treasurer’s office said that “Israel has never defaulted on an interest or principal payment, so it is considered a stable and safe investment” and that the state portfolio now has “$90 million invested in Israel Bonds and $65 million in Republic of Poland Bonds.” That combined $155 million is 0.3965% of the state’s $41.6 billion portfolio, it said.
