Cyprus is considering an early repayment of part of the €2.5 billion loan it obtained from the Russian Federation during the financial crisis, as its funding costs decline to new lows, Finance Minister Harris Georgiades said on Tuesday.
Georgiades was invited to comment on reports published in international and local media that Cyprus is considering tapping the markets for a new bond issuance exploiting favourable market conditions to repay the Russian loan which has an interest rate of 2.5%
“What I can say is that this possibility is under consideration and possibly we will be in a position for specific announcements very soon,” Georgiades said in statements after a meeting with new Central Bank Governor Constantinos Herodotou.
Cyprus’ ten year bond yields declined to 1.37% last Friday, marking a new low since 2015.
Noting that conditions in the international markets for the Cypriot economy are “extremely positive,” Georgiades said these conditions “create some opportunities which we are evaluating and we will not hesitate to utilize.”
Excluded from the financial markets, in 2011 Cyprus received from the Russian Federation a loan amounting to €2.5 billion in a bid to cover its financing needs. The loan has been rescheduled in 2013 and expires in 2021. The outstanding amount is €1.57 billion.