Cyprus repays over €1B in debt, easing financial strain

Cyprus made strides in paying down its debt in the second quarter of 2024, settling over €1 billion in bonds and loans. According to the Finance Ministry’s Debt Management Office (PDMO), this repayment approach helps reduce the national debt, boost financial stability, and potentially open up new benefits for Cypriot citizens and the economy.

In a key move in June, Cyprus issued a new seven-year bond worth €1 billion. This issuance also came with a “switch offer,” allowing investors to exchange an existing bond set to mature in 2028, worth €150 million, with the new bond. Additionally, Cyprus redeemed another bond set to mature in 2026, taking €850 million off the books.

On the loan side, the government repaid €286 million in debt, which included an early repayment of €250 million to the House Financing Corporation—a state-owned lender that had extended a six-year loan to Cyprus back in 2019 at an interest rate of 0.97%. The early payoff of this loan lowers Cyprus' interest costs, potentially freeing up funds for other public needs.

The PDMO also reported that other short-term debts and retail bonds were repaid, further chipping away at the nation’s overall debt load.

At the close of June 2024, Cyprus’ public debt was estimated at €22.8 billion, or 72.3% of its GDP. While challenges remain, the government hopes that sustained repayment efforts like this will strengthen Cyprus’ economic standing, improve investor confidence, and create a healthier financial future for its citizens.