1. Government Debt Management Unit Repo & Lending Facility

2. GENERAL POINTS Target – Lending government bonds against cash deposit. Target – Lending government bonds against cash deposit. Every PD is entitled to lend bonds subject to a pre- signed ISMA agreement. Every PD is entitled to lend bonds subject to a pre- signed ISMA agreement. Max amount to each party will not exceed 500 million ILS. Max amount to each party will not exceed 500 million ILS. TACH will operate the system. TACH will operate the system. PD will authorize TACH to credit and debit his account. PD will authorize TACH to credit and debit his account.

3. Eligible Bonds Liquid government bonds traded on the MTS-Israel system. Liquid government bonds traded on the MTS-Israel system. More than 1.25 years to maturity. More than 1.25 years to maturity.

4. Repo Period Daily renewable basis with an unlimited period. Daily renewable basis with an unlimited period. A repo agreement shall automatically expire when a bond reaches only 1 year to maturity. A repo agreement shall automatically expire when a bond reaches only 1 year to maturity.

5. Collaterals No lending without enough collaterals. No lending without enough collaterals. Cash only, deposited to a special account of MOF with the BoI. Cash only, deposited to a special account of MOF with the BoI. An extra margin might be required. An extra margin might be required. TACH will debit PD account and credit MOF account. TACH will debit PD account and credit MOF account. M.O.F will pay daily interest on the collaterals (BoI rate minus margin). M.O.F will pay daily interest on the collaterals (BoI rate minus margin). MTM will be applied on a daily basis upon changes in the price of the bonds. MTM will be applied on a daily basis upon changes in the price of the bonds. Excess amount – TACH will debit MOF account and credit PD ’ s account upon request. Excess amount – TACH will debit MOF account and credit PD ’ s account upon request.

6. Repo Transaction PD will address TACH. PD will address TACH. The TACH will approve request subject to collateral deposit. The TACH will approve request subject to collateral deposit. The nostro account of a TACH member will be credited with the bonds he borrowed and debited with cash (collaterals). The nostro account of a TACH member will be credited with the bonds he borrowed and debited with cash (collaterals). A non clearing house member transactions will be cleared in a special designated sub-account of TACH member. A non clearing house member transactions will be cleared in a special designated sub-account of TACH member. Interest will be credited on a daily basis. Interest will be credited on a daily basis. End of a repo transaction upon PD request and/or a bond with 1 year to maturity. End of a repo transaction upon PD request and/or a bond with 1 year to maturity.

7. Interest Payment of the Bond The PD will pay the interest to TACH on each borrowed bond in his account on the COM date. The PD will pay the interest to TACH on each borrowed bond in his account on the COM date. TACH will automatically debit PD account on a gross basis. TACH will automatically debit PD account on a gross basis. The interest will be held in the collateral account from the EX date and paid on payment date. The interest will be held in the collateral account from the EX date and paid on payment date.

8. Fees and Commissions TACH commissions: TACH commissions: A fixed monthly fee. A fixed monthly fee. A clearing fee on a transactional basis. A clearing fee on a transactional basis.