Cyprus bond achieves best borrowing rate in Euro era

The Cyprus 10-year bond issued on Tuesday represents the lowest reoffer yield and the lowest coupon that the country has ever achieved in international capital markets for a euro-denominated issuance and the largest ever transaction for Cyprus in this currency, the Ministry of Finance has said.

According to a press release by the Ministry of Finance’s public debt management office which includes the details of the issuance the order-book closed at 11:00 GMT yesterday “with a final size of € 5.675bn and approximately 279 different investors participated in the transaction, representing the largest order-book Cyprus has achieved since its return to markets in June 2014.”

“The new 10-year benchmark represents the lowest reoffer yield (2.40%) and the lowest coupon (2.375%) that the Republic of Cyprus has ever achieved in international capital markets for a benchmark size Euro-denominated syndicated issuance,” the press release says.

By national size, it adds, “it is also the largest syndicated Euro transaction from Cyprus since the return to capital markets in 2014 and matches the largest ever transaction for Cyprus in this currency.”

The issuance had a broad geographic distribution of investors comprised largely of international investors across Europe (28%) and the UK (28%). This was followed by Cyprus (19%), Germany / Austria (14%), Greece (6%), US Offshore (3%) and investors from the rest of the world (2%)

“By investor type, the quality of the orderbook was high with real-money demand dominating the orderbook,” the Finance Ministry said.

Fund Managers were the largest investor group at 42%, closely followed by banks (40%), hedge funds (8%), central banks (4%), insurance and pension funds (3%) and others (3%).