Israel’s borrowing spree reaches Palm Beach as US municipalities pile in ( www.ft.com )

One of the largest investors in Israel’s bonds is not a hedge fund titan or a Wall Street trader, but an elected municipal comptroller investing the tax dollars of Palm Beach County.

Joseph Abruzzo, the overseer of investments for Florida’s largest county, holds $700mn out of his $4.6bn overall portfolio in so-called Israel bonds. These are special overseas debt issuances that have been scooped up by US state and local governments since the conflict between Israel and Hamas began.

“I’m ecstatic that we have these bonds in our portfolio,” Abruzzo told the Financial Times. He cited “the great returns, the safety, and the benefit to the taxpayers of Palm Beach County” of debt that is becoming an important, but also controversial, part of Israel’s efforts to finance a longer war.

Israel Bonds, the official underwriter for the debt, says it has sold more than $3bn of the debt worldwide, three times the annual average, since October 7 last year — the date of the Hamas assault that triggered the latest conflict. Local governments in the US including the states of Florida, Indiana and Ohio have been enthusiastic recent buyers.

The investments by Palm Beach, as well as Miami-Dade, Broward and other Florida counties, were made possible by a 2008 state law that added Israel bonds to US Treasuries, federal agency-backed debt, money market funds and other low-risk assets. No other foreign government bonds are allowed.