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Cyprus issues first €1 bln sustainable bond

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Cyprus joined the sustainable bond markets issuing its inaugural ten-year eco bond for €1 bln with a coupon of 4.125% and a reoffer yield of 4.219%, the Finance Ministry’s Public Debt Management Office announced.

There was huge interest in the eco bond, which was well oversubscribed.

According to the PDMO, the issuance successfully attracted the highest-ever offer book with bids exceeding €12 billion.

The PDMO said the proceeds would be used to finance or refinance projects and activities that promote sustainability, combating climate change and other environmental and social purposes, as defined in Cyprus’ Sustainable Finance Framework.

The bond’s issue date is 13 April 2023, with a 10-year maturity set for 13 April 2033.

Green or sustainable bonds constitute a financing tool which attracts importance from international investors.

“Its use by Cyprus will offer multiple benefits, in providing access to new investors and will increase interest in international capital markets over the Republic’s issuances, widening the state’s financing options,” the ministry said.

The lead managers of the bond issue were Barclays, HSBC, J.P. Morgan, Morgan Stanley (B&D) and Société Générale.

The international ESG (Environmental – Social – Governance) bond market is growing, with bond issuance in 2022 reaching €1 trillion.

An increasing number of European Union member states are issuing or preparing to issue eco bonds.