Most of the state’s financing needs for 2019 have been covered by the three Euro Medium Term Notes (EMTN) bonds that were issued earlier in the year, according to the public debt management office of Cyprus.
Cyprus is to also repay part of a €2.5 billion loan it obtained from Russia back in 2013 when its banking system had collapsed. This is something that Finance Minister Harris Georgiades has already announced.
Net financing needs in 2019 amount to 2.3 billion euros and pre-payments of €1.3 billion will be for loans ending in 2020-2021. That is, for the next tranches of the Russian loan, according to the Office.
In addition to the €2.3 billion raised from the three EMTN issuances early in the year, the government also raised smaller amounts from domestic and retail bonds.
Part of the island’s surplus – estimated at €700 million – will also go towards loan repayments. If everything goes according to plan, liquidity in state funds at the end of the year will cover financing needs for the first nine months of 2020.
With the exception of the Russian loan, debts of €1.4 billion mature before the end of 2020. Debt maturities in 2022 are estimated at over €2 billion, while in 2023 these will reach €1.5 billion. Larger debt maturities are set for 2028 with these reaching €2.5 billion.
Data from the Office, however, indicates that the profile of investors buying Cypriot state bonds has changed compared to the crisis years when the percentage of government securities held by hedge funds was as high as 40%.
Today, the share of hedge funds is limited to 9% while 55% of the debt is held by fund managers and 22% by banks. In terms of geographical origin, 38% of investors come from Europe, 27% from Germany, Austria and Switzerland, 22% from the United Kingdom, while few come from the US and the rest of the world.
The cost of public debt was reduced to 2.3% in 2018 from as high as 4.2% back in 2012.