CYP 575 mln worth of bids chase CYP 260 mln
There was a massive stampede for participation during Tuesday’s multiple bond auctions, the first since the Cyprus pound joined ERM2 and after the 0.50% rate reduction, with the long dated bond yields tumbling a whopping 100 basis points while the Central Bank was flooded with CYP 575.5 mln worth of applications for CYP 260 mln of securities on tender.
Bond yields took a massive plunge in the first reaction following Cyprus’ entry into ERM2 on May 2, 2005 and following the 0.50% reduction in rates on May 20, 2005, with informed sources confirming to the Financial Mirror of sizeable foreign participation and bid interest.
During the multiple bond auction for 5, 10 and 15 year notes, the ratio of oversubscription was 4 to 1, with the Central Bank receiving a total of CYP 438.5 mln bids for CYP 120 mln worth of paper on tender, while during the T-bill auctions, there were a total of CYP 137 mln worth of bids for CYP 140 mln on offer. The Central Bank did not offer hold an auction for the 2-year maturity notes.
LIVELY AUCTIONS
During the auction for up to CYP 40 mln, 5-year maturity bonds, the total value of the bids was CYP 148,171,100, the Central Bank, acting on behalf of the government, accepted only CYP 40 mln at the weighted average price of CYP 100.71 per CYP 100 nominal value, representing an annual yield of 4.84%, which was 103 basis points (bps) lower than the previous auction held on April 18 at a yield of 5.87%.
During the auction for up to CYP 40 mln, 10-year maturity bonds, the total value of the bids was CYP 139,347,800, the Central Bank, acting on behalf of the government, accepted only CYP 40 mln at the weighted average price of 103,23 per CYP 100 nominal value representing an annual yield of 4.84%, which was 100 basis points (bps) lower than the previous auction held on April 18 at a yield of 5.84%.
During the auction for up to CYP 40 mln, 15-year maturity bonds, the total value of the bids was CYP 150,966,700, the Central Bank, acting on behalf of the government, accepted only CYP 40 mln at the weighted average price of 103.24 per CYP 100 nominal value representing an annual yield of 5.04%, which was 113 basis points (bps) lower than the previous auction held on April 18 at a yield of 6.17%.
T-bill auctions
During the 13-week Treasury Bill auction for up to CYP 50 mln worth of paper on offer, the total of the bids submitted amounted to only CYP 10 mln, all of which were accepted at the weighted average price of CYP 990.25 per CYP 1,000 nominal value representing an annual yield of 3.95%, down 59 bps from 4.54% yield reached during the previous auction held on January 19.
During the 52-week Treasury Bill auction for up to CYP 90 mln worth of paper on offer, the total of the bids submitted amounted to CYP 127 mln, of which CYP 90 mln were accepted at the weighted average price of CYP 958.00 per CYP 1,000 nominal value representing an annual yield of 4.40%, down 62 bps from the 5.02% yield reached at the previous auction held on February 24.
