Poor interest for Cyprus bond auction

The Central Bank of Cyprus announced the results of the auction held on 23 June
2008, of up to EUR 100 mln 4.50% Government Registered Development Stock (GRDS)
with maturity of 5 years.

The total value of the bids submitted was EUR 11.39 mln. The competitive bids  amounted to EUR 8.33 mln and the non-competitive bids to EUR 3.06 mln. None of the
bids submitted was accepted.

With interbank interest rates racing higher ahead of a widely expected interest rate hike by the ECB in early July by at least 25 bps and perhaps another 25 bps by year-end, the bond auction attempted by the Central Bank on behalf of the government was bound to generate interest since market participants have better investment options in other financial instruments.