Marfin Popular issues €1 bln in Cyprus covered bonds

Marfin Popular Bank, the second biggest lender in Cyprus, has issued 1 bln euros ($1.4 bln) in mortgage-backed covered bonds which have been listed and trading on the Irish Stock Exchange.
The bonds carry an annual interest rate of 3-month Euribor plus 2% and mature in two years, with the possibility of an extension for a further one year. They were rated Baa1 by Moody's, the bank said in a statement on Wednesday.
The issue is part of a 5 bln euro programme by the bank to issue up to 5 bln euros in covered bonds, it said.
Marfin said it was the first issue of covered bonds in Cyprus after an amendment of legislation by parliament. The new Covered Bond Law is regarded by market participants to be one of the most robust in Europe providing “covered bond investors with strong legal protection” while Moody’s “assesses the strength of the Covered Bond Legislation as TPI positive”.
The new programme, which is part of Marfin Popular’s medium term funding plan, aims to utilise the Group’s high quality balance sheet, with a view to further enhance its already strong liquidity position, further consolidate its position in the highly concentrated Cypriot market, expand international business banking and open up further in South Eastern Europe.