Cyprus Attracts €9.6 Billion in Oversubscribed 7-Year Bond Issuance

The Republic of Cyprus has successfully garnered offers totalling €9.6 billion from international markets for its newly issued 7-year bond worth €1 billion. This announcement was made on Wednesday by the Cyprus News Agency (CNA), as the book of offers officially closed.

Initially, the bond issuance advisors set the guidance at 60 basis points above the benchmark rate (mid-swaps). However, as the volume of offers neared €7 billion, the guidance was adjusted to 55 basis points above the benchmark rate, with the yield ultimately settling at 3.295 per cent. The final pricing details are expected to be released later.

In conjunction with this new bond issuance, Cyprus announced a capped offer for the early repayment of up to €500 million from an existing bond worth €1.5 billion, which carries an interest rate of 2.375 per cent and matures in September 2028. The repurchase price for this bond is set at 98.4 per cent of its original amount.

The Finance Ministry's decision to initiate an early repayment offer for the bond maturing in 2028 is seen as a strategic move, considering that 2028 represents the largest debt maturity year for Cyprus. This specific bond has the highest outstanding amount of €1.5 billion.

According to the 2023 annual report of the Public Debt Management Office, 2028 has the highest annual debt maturities, totalling €2.8 billion. Of this amount, €1.5 billion, approximately 53 per cent, is allocated for the repayment of EMO, while €1.29 billion, or around 46 per cent, is designated for loan repayments, primarily the fourth installment to the European Stability Mechanism.

By fLEXI tEAM