CYPRUS: Largest ever euro bond issue achieves the best borrowing rate

A €1.5 bln Cyprus bond issue was the lowest reoffer yield that Nicosia has ever achieved in international capital markets for a benchmark size euro-denominated syndicated issuance and the largest ever transaction, the Finance Ministry said Wednesday.

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According to the Public Debt Management Office the issuance closed Tuesday “with a final size of €5.675bn and approx. 279 different investors participating in the transaction, representing the largest order-book Cyprus has achieved since its return to markets in June 2014.”

“The new 10yr benchmark, which extends the existing Cyprus yield curve, represents the lowest reoffer yield (2.40%) and the lowest coupon (2.375%) that the Republic of Cyprus has ever achieved in international capital markets for a benchmark size euro-denominated syndicated issuance,” the PDMO said.

It is also the largest syndicated euro transaction from the sovereign since the return to capital markets in 2014 and matches the largest ever transaction for the sovereign in this currency.

Distribution comprised largely of international investors across Europe (28%) and the UK (28%), followed by Cyprus (19%), Germany / Austria (14%), Greece (6%), US Offshore (3%) and investors from the rest of the world (2%)

“By investor type, the quality of the orderbook was high with real-money demand dominating the orderbook,” the PDMO said.

Fund Managers were the largest investor class at 42%, closely followed by banks and private banks (40%), followed by hedge funds (8%), central banks or other official institutions (4%), insurance / pension (3%) and other (3%).