By Efrat Neuman

Israeli investors may not have heard of Aflac, an accident and health insurance company from Columbus, Georgia. But it’s the biggest financial investor in the Israel Electric Corporation, holding a cool 20 percent of the utility’s debt.

In its annual financial statement for 2004, the IEC revealed Aflac’s billion dollar investment in its bonds. The American company can afford it: Its market capitalization on the stock exchange is $20 billion. The firm provides coverage to 40 million people in America and Japan, although not to Israelis. It just helps light their lives through its faith in the IEC.

Altogether, the IEC has NIS 23 billion in outstanding bonds. Of that, NIS 14 billion or $3.2 billion were issued abroad denominated in dollars, and NIS 3.6 billion or $800 million were denominated in yen. Ergo, it has $4 billion in outstanding bonds issued in foreign markets. And Aflac decided to buy a quarter of the amount.

Thus, the IEC finds itself in very classy company. In its statements, Aflac says it invested in only five enterprises: $9.5 billion in Japanese government bonds, a billion dollars in the HSBC investment bank, $870 million in Credit Suisse, $820 million in Republic of Tunisia bonds, and a billion more in the IEC.

"From 1996 to 2002, we carried out several private placements abroad, and Aflac was among the investors," says Yaron Magal, the IEC’s treasurer. "It is a very large investor that bought bundles of bonds from time to time."

Why would picky Aflac, which keeps its portfolio so tight, choose the IEC? "The reason was the high interest rates the bonds bore - 6 to 8 percent," says Magal. "They saw the offer and decided it was a good one."