CYPRUS: Record interest for 6-year retail bonds; total at €100m

 * PDMO says demand tops €37 mln, up from €27 mln last month *

Demand for 6-year Cyprus government retail bonds shot up to EUR 36.7 mln this month, up from 27.4 mln the previous month, with most of the interest continuing to come from foreign investors.

The issue has so far raised nearly EUR 100 mln for the state coffers, after the previous month’s retail bond had brought the total to EUR 61.5 mln, half of the amount the state planned to raise from investors.
This was the eighth issue of the programme that aimed to raise EUR 120 mln a year, but was slow to pick up in the first series.
The Public Debt Management Office at the Ministry of Finance said that once again the issue was oversubscribed and that foreign interest had risen 93%, up from 91% in the December issue.
The interest rate of the 2015 issue is reportedly 0.5% lower than the first year.
Depending on the holding period, the 2015 issue offers an annual interest rate of 2.5% for holding the securities up to 24 months and gradually increases to 5.5% for a minimum of 60 months holding.
The annual coupon rate for the 2014 series started from 2.75% and averaged at an attractive 4% over a six-year period, with a minimal 3% income tax on the interest, far better than the 30% imposed on all interest-yielding products.
Next, is the February 2015 series, the ninth so far, with applications open from January 2 to 20 and issued on February 2, 2015.