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Email this12:18 am
October 21, 2013
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Since EQ dropped its relatively good rate on 10 year GICs, alternatives have been few.
Israel 10 year Jubilee bonds in CDN$ are 2.64%; 15 year bonds are 2.90%.
Interest paid semi-annually.
Minimum $25,000.
Israel has never defaulted.
I don't know how they are rated by the rating services. Perhaps someone else can give info on that.
It's an alternative, for a portion of one's funds maybe; adds diversification.
I've never bought them and am not pushing them. I might buy some but am undecided. Just letting you know.
https://www.israelbonds.ca/rates/
I'd appreciate any relevant feedback.
6:12 am
September 7, 2018
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Loonie said
Israel has never defaulted.
I don't know how they are rated by the rating services. Perhaps someone else can give info on that.I'd appreciate any relevant feedback.
Standard & Poor's credit rating for Israel stands at AA- with stable outlook. Moody's credit rating for Israel was last set at A1 with stable outlook. Fitch's credit rating for Israel was last reported at A+ with stable outlook. In general, a credit rating is used by sovereign wealth funds, pension funds and other investors to gauge the credit worthiness of Israel thus having a big impact on the country's borrowing costs.
I have no problem with buying State of Israel Bonds (and have had them in the past) but I have no interest in a term of 10 year or 15 year. Right now I am quite happy with my Canadian bank shares (both common and preferred).
8:11 am
April 6, 2013
Online
With an S&P rating of AA-, the Israel bonds have a lower estimated risk of default than the A+ rated bonds from the provinces of Alberta, Ontario, and Manitoba. But, higher estimated risk than the AAA rated bonds from the province of British Columbia and Government of Canada.
They are about the same risk as province of Saskatchewan bonds that are rated one notch higher at AA.
8:59 am
January 12, 2019
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.
For myself, I'd have two Very Big concerns ...
-
1. Locking up a good sum of $$$ for such an Extended period of time.
2. Probating that part of the estate, in a foreign country, halfway around the world.
I'd pass.
- Dean
" Live Long, Healthy ... And Prosper! "
10:29 am
April 6, 2013
Online
Foreign probate is likely not an issue as the Israel bonds purchased through Canada-Israel Securities, Limited are registered through Computershare in Toronto.
One can see that in the transfer and change of address forms at https://www.israelbonds.ca/all-forms/.
11:20 am
February 27, 2018
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What are the income tax implications? Is there a tax treaty between canada and Israel? Meaning income tax is paid basically once. The two taxes combined, would equal the total tax due.
i would require hazard pay to invest any money in the middle east, it's one hell of a hot zone. I'd consider a return of 15% for a 5 year bond a good starting point.
11:33 am
April 6, 2013
Online
No treaty is needed. Canadian foreign tax credit applies regardless of any tax treaty.
In some cases, it can be better without a tax treaty as the Canadian foreign tax credit is available for any taxes withheld. However, if there is a tax treaty and the treaty reduces the tax by the other country on the income to 10% while the withholding is 25%, then the foreign tax credit is only available for the 10% required under the treaty.
If one does not file the foreign tax return to get a tax refund of the extra 15%, then that 15% is considered to be a voluntary payment and not involuntary foreign tax paid! 
I don't think the Middle East is as bad as the media suggests. In fact, lots of those foreign journalists actually make it back home after their visits! 
I saw news stories about some schools in New York city where they have "shooting" drills in addition to fire drills. Students are trained to duck under their desks should bullets start flying through their classroom windows!
4:32 pm
January 12, 2019
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Dean said
.
For myself, I'd have two Very Big concerns ...1. Locking up a good sum of $$$ for such an Extended period of time.
2. Probating that part of the estate, in a foreign country, halfway around the world.I'd pass.
Dean
.
And Concern #3 ... The Middle East is basically; 'A Never Ending War Zone'.
No offence to anyone here, but I'd sooner keep my money in a sock.
- Dean
" Live Long, Healthy ... And Prosper! "
4:59 pm
October 21, 2013
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I wonder if Computershare Trust Company of Canada issues T5s for these bonds, or whether they can. I suppose that as a Trust Company they could, but I don't know if they can in this case. The sales end seems to be trying very hard to match Canadian investor interests.
Duration is always a question, but when they are higher rated than Ontario which insures Ontario credit union deposits, I am inclined to think twice.
I doubt I'll still be alive in 15 years, maybe not even 10, so that is a disincentive for me. but as a strictly-for-income proposition, these bonds have an attraction.
Personally, I doubt Israel will be any more unstable than many other countries. The US itself looks unstable to me right now, but of course the US has traditionally been a strong supporter of Israel.
FWIW, Israel has been on a state of high alert forever, and has some of the best security systems in the world. Anyone who has ever been there or on an El Al flight will have experienced this.
They have continued to pay interest and principal during many serious crises including the Seven Day War in 1967. I was in university at that time and remember some of the Jewish students leaving school and going to Israel to join the army. Israel has a lot of overseas support. I don't recall anyone dropping out of university here to voluntarily joint the US forces in Viet Nam - a war that was going on simultaneously.
I do find it very difficult to see up to fifteen years into the future although increasing environmental collapse seems a virtual certainty. I don't see any safe havens from that. We are "all in it together," as the current mantra goes, like it or not. This will certainly have lots of economic implications.
5:45 pm
April 6, 2013
Online
Anyone who pays interest or dividends or is an agent through which interest or dividends is paid can issue Canadian tax slips.
One doesn't have to be a broker, trust company, or a bank to do so.
Ten to fifteen years is a long time to lock money into a bond or GIC. That's a long enough time horizon to invest in stocks.
11:32 pm
October 21, 2013
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I'd consider it a minimal horizon for the stock market, and generally unsuitable for someone in their mid-70s like me, but individuals will vary. It would have to produce an income stream to be worth considering as an alternative. Regardless, I would only put a small portion of my assets into it, just enough to give a small life to the miserable rates I am going to get going forward but not a problem if rates go up (in which case I can make it up in better rates later). If I don't live that long, then I at least get a decent rate for the next few years while I'm here.
Which dividend producing stocks would be equally weighted with State of Israel and Province of Ontario for safety? Stocks hold one advantage - liquidity - but they can't be relied upon to hold their price at that time.
8:10 pm
September 6, 2020
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Dean said
.
For myself, I'd have two Very Big concerns ...1. Locking up a good sum of $$$ for such an Extended period of time.
2. Probating that part of the estate, in a foreign country, halfway around the world.I'd pass.
Dean
I bought Ontario Hydro strip bonds in the mid 1980's. They matured in 17 1/2 and 18 1/2 years. I cashed them with about 5 years to maturity. Nothing wrong with them. I was a lot younger. I'll pass on a 10+ year bond.
Have a Great Day
8:15 pm
September 6, 2020
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Norman1 said
Anyone who pays interest or dividends or is an agent through which interest or dividends is paid can issue Canadian tax slips.One doesn't have to be a broker, trust company, or a bank to do so.
Ten to fifteen years is a long time to lock money into a bond or GIC. That's a long enough time horizon to invest in stocks.
With Canadian/US stocks I could sell tomorrow and have the cash in hand later in the week.
Have a Great Day
8:21 pm
September 6, 2020
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Loonie said
I'd consider it a minimal horizon for the stock market, and generally unsuitable for someone in their mid-70s like me, but individuals will vary. It would have to produce an income stream to be worth considering as an alternative. Regardless, I would only put a small portion of my assets into it, just enough to give a small life to the miserable rates I am going to get going forward but not a problem if rates go up (in which case I can make it up in better rates later). If I don't live that long, then I at least get a decent rate for the next few years while I'm here.Which dividend producing stocks would be equally weighted with State of Israel and Province of Ontario for safety? Stocks hold one advantage - liquidity - but they can't be relied upon to hold their price at that time.
I still have some stocks that I have never sold. They have unrealized capital gain. A lot of stocks in the last 6 yeas have not appreciated. They just paid a dividend quarterly. I have added to my holdings in the last 4 years. They have unrealized capital losses. They paid dividends.
Have a Great Day
10:40 pm
April 6, 2013
Online
Loonie said
…
Which dividend producing stocks would be equally weighted with State of Israel and Province of Ontario for safety? Stocks hold one advantage - liquidity - but they can't be relied upon to hold their price at that time.
Dividend paying common shares can't really be compared with bonds. That's why ratings agencies don't rate common shares.
At most, the ratings agencies will rate preferred shares. But, that will be on a different scale, like P-2, than the scale for bonds.
There is no legal obligation to declare and pay a dividend. So, dividends are not in the same league as a mandatory interest payment on a bond.
Skipping a bond interest payment will give the bondholders the legal right to take control. A kind of corporate "repossession" by the bondholders!
7:46 pm
October 21, 2013
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So, why do some people on this site try to convince me that certain stocks are better because of the dividends when they know I'm interested in safety and predictabiity?
12:24 am
September 6, 2020
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Norman1 said
No treaty is needed. Canadian foreign tax credit applies regardless of any tax treaty.In some cases, it can be better without a tax treaty as the Canadian foreign tax credit is available for any taxes withheld. However, if there is a tax treaty and the treaty reduces the tax by the other country on the income to 10% while the withholding is 25%, then the foreign tax credit is only available for the 10% required under the treaty.
If one does not file the foreign tax return to get a tax refund of the extra 15%, then that 15% is considered to be a voluntary payment and not involuntary foreign tax paid!
I don't think the Middle East is as bad as the media suggests. In fact, lots of those foreign journalists actually make it back home after their visits!
I saw news stories about some schools in New York city where they have "shooting" drills in addition to fire drills. Students are trained to duck under their desks should bullets start flying through their classroom windows!
Ontario schools have lockdown drills in case an active shooter is in the area. Lock classroom door. Get down low.
Have a Great Day
8:48 am
April 6, 2013
Online
Loonie said
So, why do some people on this site try to convince me that certain stocks are better because of the dividends when they know I'm interested in safety and predictabiity?
Depends on what "better" means.
Focusing on stocks that have a record of reliable and growing dividends screens out lots of the garbage that's out there. Fly-by-night mining companies that have not found a deposit yet. Companies that are looking for a real problem, for the product they are peddling, to solve and have no profits to show.
In that sense, dividend stocks are better.
1:51 pm
February 27, 2018
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There is an investment strategy, based on your age, there's an allocation of where your money should be.
In our later years, to be dependent upon the stock market is very risky. If the market is used as a source of entertainment, that's one thing. If a high investment return is needed to buy your groceries or to make ends meet, that's something else.
Many never know when they have enough money, they chase the mighty dollar up until the day they die. You need to know when to walk away. Gluttony isn't a great way to live your life.
7:07 am
September 30, 2017
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Jubilee Bonds - $25K min. subs. ($5k incr within 1 yr of purchase)
- CAD 7th Series
- 10 year 3.36%
- 15 year 3.61%
Maccabee Bonds - $5K min. subs. ($500 incr within 1 yr of purchase)
- CAD 7th Series
- 10 year 3.21%
- 15 year 3.46%
*Issued on the 1st and 15th of each month.
*Semi-annual interest paid every May 1st and November 1st
Please write your comments in the forum.