Cyprus which emerged from a painful bailout programme in 2016 today lined up a €1.5bn bond issue with a yield of 2.4%. So far investors have placed more than €5.5bn in orders.
By comparison a 10-year bond in October 2015 carried a yield of 4.25%, while a 7-year bond in June last year was priced to yield 2.8%. On Friday Standard & Poor’s bumped up Cyprus's sovereign credit ratings to BBB- from BB+ with a stable outlook.
The Financial Times reports that Standard & Poor’s may consider upgrading Cyprus again in the next two years if the economy deleveraged or if the banking sector cut its non-performing exposures significantly.
The upgrade is especially helpful to Cyprus as it takes the country into the investment grade ratings, which in turn means the country’s debt qualifies for purchases by the European Central Bank.
The island’s economy is expected to grow by 4% this year taking it back to its pre-crisis levels of 2011.