Strong indication of trust in Cyprus for its first EUR 1 billion 15-Year Bond, with a 2,75% interest.

Strong indication of trust in Cyprus for its first EUR 1 billion 15-Year Bond, with a 2,75% interest.

Tuesday, 19th February 2019, was a historic day for Cyprus as it raised EUR 1 billion through its first ever 15-year government bond issue, on the international markets (http://www.financialmirror.com/news-details.php?nid=36558).

There was an 8 to 1 bid to cover ratio, as total offers received reached €8 billion, with an interest rate of 2,75 per cent (http://www.cna.org.cy/WebNews-en.aspx?a=b29d96430b5348f28406c18cf91a0dd7).

The Cypriot Finance Minister Harris Georgiades stated that this “is a powerful indication of trust in the stability and prospects of our country” (http://www.ekathimerini.com/237869/article/ekathimerini/business/successful-bondissue-for-cyprus).

The Finance Minister also declared that the issuance of this bond in the history of the Republic of Cyprus “was a very important development” and that there could be “no stronger confirmation of confidence” (https://www.nytimes.com/aponline/2019/02/19/world/europe/ap-eu-cyprus-economy.html).

According to current news, the maturity date of the bond is set for 26th February 2034 (https://www.stockwatch.com.cy/el/article/trapezes/anoixe-vivlio-prosforon-gia-ekdosi-15etoys-omologoy).

The aim of the issuance of the bond is to cover most of Cyprus’ financial needs for 2019 (https://www.stockwatch.com.cy/el/article/trapezes/anoixe-vivlio-prosforon-gia-ekdosi-15etoys-omologoy).

It is worth pointing out that the conditions for the bond are positive, as Cyprus is on a fast track and expects continued positive fiscal performance (https://www.stockwatch.com.cy/el/article/trapezes/anoixe-vivlio-prosforon-gia-ekdosi-15etoys-omologoy).

Another important point to note is that Cyprus was lifted above investment grade, by international rating agencies, such as Standard and Poor’s in September 2018, and Fitch Ratings in October 2018 (https://cyprus-mail.com/2018/09/15/sp-upgrades-cyprus-to-bbb-back-to-investment-grade/) (https://cyprus-mail.com/2018/10/20/fitch-upgrades-cyprus-to-investment-grade/).