10-year bond yields tumble to 4.22%

The latest bond auction conducted by the Central Bank for 10-year bonds and 52-week T-Bills was heavily oversubscribed with prices jumping to a record as yields, which move in the opposite direction fell sharply.

During the auction held on September 28, 2005, the Central Bank was swarmed with CYP 481.06 mln of bids for the CYP 50 mln each issues, which indicates strong institutional interest to purchase government issued paper.

At the auction for the 10-year bonds and a coupon of 4.75% for up to CYP 50 mln, the Central Bank, acting on behalf of the government received bids totaling CYP 266.315.200 of which it accepted only CYP 50 mln at the weighted average price of CYP 104,32 per CYP 100 nominal value representing an annual yield of 4.22%, compared to the 4.84% yield agreed at the June 7 auction.

T-Bill yields decline

During the auction for the sale of up to CYP 50 mln Treasury Bills with 52 weeks maturity, the total value of the bids submitted was CYP 214.744.000, of which CYP 50 mln were accepted at the weighted average price of CYP 966,22 per CYP 1.000 nominal value representing an annual yield of 3,51%, compared to the 4.01% yield agreed at the previous auction held on July 12.