Cyprus Bond issue has exceeded expectations

By Soulla Dionysiou, Lawyer

On Tuesday 23rd of April the Cyprus government announced that it will issue 5-year and 30-year maturity Bonds with the aim of early repayment of a 2.5 Billion loan to the Russian Federation.

The debt issuance will be run by Goldman Sachs, Barclays, Deutsche Bank, J.P. Morgan, Morgan Stanley and Societe Generale, and according to the Ministry of Finance of Cyprus the island nation has the following ratings, Fitch BBB- and DBRS BBBL, Moody’s Ba2-, and Standard & Poor’s BBB-.

Already on Wednesday Cyprus’s Bond issuance has exceeded expectations, having gathered over 9-billion-euro demand. This is quite remarkable considering that in 2013 the island nation needed an IMF and European Union bailout due to its floundering Banking sector and high dept to GDP levels.

In fact, Cyprus’s 10-year Bond yield fell towards 1.51 percent and 15 year dropped to 2.18 percent.

It should be noted however that unlike previously, the Cyprus Investment Program no longer accepts investment in government Bonds as a valid investment with the aim of obtaining citizenship.

* Soulla Dionysiou – Founding Partner of S. Dionysiou & Partners LLC – sdionysiou@dplawcyprus.com

 

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