Cyprus taps bond markets to raise €1 bln

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Cyprus will tap the international markets on Thursday by issuing a €1 bln ten-year European Medium-Term Note (EMTN) to cover fiscal needs arising from the pandemic.

The Finance Ministry said, “the Republic of Cyprus, rated BBB- (positive) by Standard and Poor’s, Ba1 (stable) by Moody’s, BBB- (stable) by Fitch and BBBL (positive) by DBRS, has mandated Barclays, Citi, Deutsche Bank, Goldman Sachs and HSBC to lead manage a single-tranche EUR-denominated RegS CACs benchmark 10yr issuance under the EMTN Programme.”

The transaction is expected to be launched in the near future, subject to market conditions.

The issuance aims to strengthen cash buffers to cover Cyprus financing needs regarding maturing debt and fiscal requirements, as Cyprus is expected to record budget deficits in 2022 due to the Covid crisis.

The government strategy aims at least one market exit annually while maintaining cash buffers covering debt maturities of the next nine months on a rolling basis.

Cyprus public debt is estimated at €24.3 bln while debt maturities for 2022 are estimated at €1.92 bln.