FINANCE: Cyprus to borrow EUR 1.25 bln from international markets in 2020

Cyprus financing needs for 2020 will be covered by bond issuances on international capital markets amounting to €1.25 bln, the Finance Ministry’s Public Debt Management Office (PDMO) said.

In an investor presentation, PDMO said Cyprus’ total financing needs for 2020 amount to €1.7 bln and will be covered by an EMTN issuance amounting to €1.25 bln, €0.3 bln in domestic treasury bills, €0.1 bln in loans and €0.1 bln in retail bonds.

Cyprus’ financing needs include the early repayment of the bailout loan Cyprus obtained from the International Monetary Fund during the 2013 financial crisis amounting to €0.7 bln.

The PDMO did not clarify whether the €1.25 bln will be garnered in one or two EMTN issuances, noting however that “the majority of financing is expected to be completed in the first quarter of 2020.”

According to PDMO data, Cyprus general government debt declined to €21.3 bln or 99% of GDP at end-September, and it’s estimated to decline further to 97.4% by the end of 2019 while continuing on a downward trajectory in the coming years, falling to 81% in 2022.

The PDMO added cash buffers at year end to cover the financing needs of the first nine months of 2020 and respectively of 2021.

Furthermore, it announced that the central government’s debt which correspond to 99% of Cyprus’ debt declined to €21.10 bln at the end of September, marking a reduction of €1.7 bln since the end of June, mainly due the early repayment of the loan Cyprus obtained from Russian in 2011.

A percentage of 40% or €8.4 bln of Cyprus’ debt are loans, of which €6.3 bln was granted by the ESM during the crisis, while EMNT bonds amount to €8 bln or 38% of Cyprus’ debt, followed by domestic bonds at €3.48 bln or 16.5% of total debt.