Cyprus Issues Bonds to Pay Russian Loan Faster

Cyprus has mandated investment banks to manage a double bond issue comprising a 5-year and a 30-year euro denominated bonds, the country’s Ministry of Finance announced on Wednesday, according to Ekathimerini.

Finance Minister Harris Georgiades said the Ministry is considering an early repayment of the loan it obtained in 2011 from the Russian Federation. The loan’s outstanding amount is $1.74 billion.

“The REPUBLIC OF CYPRUS, rated BBB- (stable) by Standard and Poor’s, Ba2 (stable) by Moody’s, BBB- (stable) by Fitch and BBBL (stable) by DBRS, has mandated BARCLAYS, DEUTSCHE BANK, GOLDMAN SACHS INTERNATIONAL, J.P. MORGAN, MORGAN STANLEY and SOCIETE GENERALE to lead manage a EUR-denominated dual-tranche RegS, CACs benchmark,” the Finance Ministry said in statement.

“The deal comprises a EUR benchmark December 2024 fixed rate tranche and a EUR benchmark May 2049 fixed rate tranche. The issue is expected to be launched in the near future subject to market conditions,” the statement added.

Georgiades told state radio on Thursday that the combined interest rate from the five-year bond issue and Cyprus’ first-ever 30-year issue is under 2 percent, meaning the country will pay less and have more time to repay.

Cyprus on Wednesday secured 500 million euros from its five-year bond issued at a 0.625 percent rate. The 30-year issue raised 750 million euros at 2.75 percent.