Cyprus attracts €6.7 billion in oversubscribed 7-year bond issuance

The Republic of Cyprus has drawn offers totalling €6.7 billion from international markets for its newly issued 7-year bond, according to a report released on Wednesday by the Cyprus News Agency (CNA).

In addition, the agency reported that this issuance has been oversubscribed nearly seven times.

This high demand led to a narrowing of the initial price guidance to 55 basis points above the benchmark rate, with the yield settling at 3.295 per cent. The official pricing is expected to be finalised later.

Alongside the new bond issuance, a capped offer was announced 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 is set at 98.4 per cent of the original amount.

What is more, the Finance Ministry’s decision to initiate an early repayment offer for the 2028 maturing bond is being viewed as strategic, as that year represents the largest debt maturity. This particular bond has the highest outstanding amount of €1.5 billion.

According to the annual report of the Public Debt Management Office for 2023, the year 2028 sees the highest annual debt maturities totalling €2.8 billion.

Of this amount, €1.5 billion, which corresponds to approximately 53 per cent, relates to the repayment of EMO, while €1.29 billion, a share of around 46 per cent, is allocated to loan repayments, primarily the fourth instalment to the European Stability Mechanism.