Insider Economy Cyprus bonds exceed expectations

Cyprus bonds exceed expectations

After two successful bond issues, Cyprus yesterday raised €1.25 billion from European markets and is now able to pay-off a Russian loan. With a five-year and a 30-year bond, Cyprus tapped the markets for the second time this year. The first time was in February. The interest rate on the 5-year bond was 0.65% (mid swap + 60 basis points) and for the 30-year bond it was 2.88% (mid swap +175 basis points).

Interest rates initially fluctuated at higher levels. The weighted average yield of the two interest rates is 1.98%. Demand exceeded €4.9 billion for the 5-year bond and €5.9 billion for the 30-year bond. Cyprus raised €500 million from the issue of the five-year bond, and €750 million from from the 30-year bond. The Ministry of Finance’s goal was to raise up to €1.3 billion for the early repayment of the Russian €2.5 billion loan the Republic of Cyprus got back in 2011. Since then, the dues had fallen to €1.57 billion. And in September, another installment of €300 million was paid off.

For the first time this year, Cyprus issued a15-year bond with an interest rate of 2.75% in February, drawing €1 billion. Yesterday, the yield on the 5-year bond with maturities by end of 2024 had a return of 0.67% on the secondary market. The bond was priced at 2.75%. The five-year Italian bond yesterday had 1.83% yields on the secondary market, the Portuguese had 0.14% and the Greek 2.17%.

For the 30-year bonds, the Italian yield was 3.64%, the Portuguese 2.27% and the Greek 4.23%. The state’s gross debt stood at €22.26 billion by end of February, with the Finance Ministry planning to see it drop to €20.7 billion or 96% of GDP by end of the year.

Finance Minister Harris Georgiades has expressed full satisfaction over the €1.25 billion return from the two European bonds. In a statement, he said that “our country has managed to establish a very positive image over its economy worldwide, and this is reflected within the investment community.”

He also said that not many countries can issue such long-term bonds.

By Theano Theopoulou

 

Read more:

https://in-cyprus.com/state-borrows-e7-2-mn-through-6-year-retail-bonds-issue/

Top Stories

People more important than the economy, pope says about Covid crisis

  Pope Francis said on Sunday that people are more important than the economy, as countries decide how quickly to reopen their countries from coronavirus...

Greens urge awareness campaign to protect sharks after one spotted off Limassol

    A shark spotted and filmed attacking a sea turtle more than a nautical mile off Limassol is an endangered species protected under international conventions...

Elderly woman reported missing in Nicosia (photo)

  Police are asking for the public to help find Elli Michaelidou, 87, who has been missing from her home in Lykavitos, Nicosia since 8.30...

Malta to reopen its airport on July 1

  Malta will reopen its airport to passenger flights on July 1, Prime Minister Robert Abela said on Sunday, as the Mediterranean island rolls back...

Latest on the worldwide spread of the coronavirus

  Gradual easing of coronavirus restrictions around the world included some openings for the faithful, including Jerusalem's Al-Aqsa mosque compound which reopened to Muslim worshippers...

Taste

Local cuisine: An introduction

Rich in fresh ingredients and tasty herbs, offers the very best of Mediterranean culinary delights. Head out to a tavern and feast on a...

Spiced lamb with beetroot salad and scented yoghurt

Lay the lamb on a tray, skin side down. Rub with crushed garlic, sprinkle with spices and ground pistachios, wrap in plastic wrap and...

Easy seafood pasta with white wine sauce

Ingredients: 2-3 tbsp olive oil 1 garlic clove, chopped 2-3 tablespoons of whipped cream 1/3 cup white wine 300g spaghetti, roughly broken 300-400g of...

Traditional salads that will blow your mind away

This traditional salads will make you actually love salads! Cyprus may be famous for souvla and kleftiko but if you try the traditional salads with...