Cyprus pays off costly crisis loan early

The Cypriot finance minister says the government is repaying an IMF rescue loan faster and at a lower rate after a double bond issuance expected to secure most of the country’s borrowing needs for 2020.

Finance Minister Constantinos Petrides expressed on Tuesday his satisfaction over the conclusion of the issuance of two bonds denominated in euro currency with low interest rates, a 10-year bond for €1 billion and a 20-year bond for €750 million.

According to the Cyprus News Agency, their indicative yields so far stood at 0.73% for the 10-year bond and at 1.33% for the 20-year bond.

Petrides said the bond was being issued to secure borrowing at lower rates while also repaying an IMF loan.

“Cyprus is able to cover its own financing needs from the markets,” the minister said.

Petrides also said Cyprus would be saving more than €15 million in interest rates by paying off IMF before the deadline, according to CNA.

Former finance minister Harris Georgiades, who stepped down recently from his post, was largely credited for steering the economy out of the crisis. He wrote on Twitter in December that it was "time to move on."

Last year, the former minister managed a similar repayment of a 2.5 billion Russian loan two years in advance without the government incurring penalties due to an early payback clause.

The Republic of Cyprus has been on the rebound after the Mediterranean island’s largest lenders were badly affected by an economic crisis in 2013.

But the island-nation still has a long way to go. According to Reuters, Cyprus was among a handful of countries in the third quarter where banks supervised by the European Central had the highest ratio of non-performing loans (NPLs).