05/10/2015 13:10
Cyprus is planning its first sale of benchmark, 10-year government debt since the financial crisis that left the island in need of a €10bn bailout according to Financial Times, citing statements of the Minister of Finance Harris Georgiades.
According to FT one Cypriot official said that the country plans to raise about €1.5bn before the end of the year as stimulus measures from the European Central Bank and economic recovery spurs renewed investor interest.
It is added that last year, Cyprus made the swiftest debt market comeback of any bailed-out country in Europe, selling €750m in five-year debt at a lower than expected rate of 4.85 per cent.
“In contrast with neighbouring Greece, the country swallowed the reforms demanded by creditors, including the adoption of new foreclosure and insolvency laws, and has been subsequently praised by the International Monetary Fund for accepting difficult change and producing positive results” as noted by the FT.
Finance minister Harris Georgiades told the FT that Cyprus had been successfully implementing an ambitious reform agenda. “The public finances have been consolidated, the banking sector stabilised and the economy has exited the recession and is registering positive growth,” he said.
As regards the new bond, the minister added that “confidence has been restored and market access re-established. Market conditions permitting, we are planning a new bond issuance by the end of the year in line with our annual funding programme, but the exact timing and details have yet to be determined.”
Officials in Nicosia, cited by the FT, say that the maturity of the next bond issued would depend on international market appetite, but according to one Cypriot financial analyst close to the government it “pretty much” has to be a 10-year issue.
It is noted that yields on the existing 2021 year bond issued by Cyprus have dropped from 5.75% in February to 3.69% as prices for the country’s bonds rise while one analyst predicts that Cyprus will be able to borrow over 10 years at a rate of 3.5%.
According to FT one Cypriot official said that the country plans to raise about €1.5bn before the end of the year as stimulus measures from the European Central Bank and economic recovery spurs renewed investor interest.
It is added that last year, Cyprus made the swiftest debt market comeback of any bailed-out country in Europe, selling €750m in five-year debt at a lower than expected rate of 4.85 per cent.
“In contrast with neighbouring Greece, the country swallowed the reforms demanded by creditors, including the adoption of new foreclosure and insolvency laws, and has been subsequently praised by the International Monetary Fund for accepting difficult change and producing positive results” as noted by the FT.
Finance minister Harris Georgiades told the FT that Cyprus had been successfully implementing an ambitious reform agenda. “The public finances have been consolidated, the banking sector stabilised and the economy has exited the recession and is registering positive growth,” he said.
As regards the new bond, the minister added that “confidence has been restored and market access re-established. Market conditions permitting, we are planning a new bond issuance by the end of the year in line with our annual funding programme, but the exact timing and details have yet to be determined.”
Officials in Nicosia, cited by the FT, say that the maturity of the next bond issued would depend on international market appetite, but according to one Cypriot financial analyst close to the government it “pretty much” has to be a 10-year issue.
It is noted that yields on the existing 2021 year bond issued by Cyprus have dropped from 5.75% in February to 3.69% as prices for the country’s bonds rise while one analyst predicts that Cyprus will be able to borrow over 10 years at a rate of 3.5%.