CDB to issue CYP 8 mln bond

The Cyprus Development Bank (CDB) will proceed with the issue of 10-year Non-secured Subordinated Debentures (Tier 2 Capital). The funds will be used to strengthen CDB’s capital adequacy ratio, which stood at 15.7% as at 30 September 2005.

The total issue amounts to CYP 8 mln and will be addressed to institutional investors. The CDB has the right to redeem the whole amount or part of the debentures on their expiry at their nominal value plus accrued interest. The nominal value of the bonds is CYP 100 and are offered at par with minimum subscription of CYP 40.000 and with the same multiplier. The bonds mature in 10-years time but the CDB has the option to repay them after 5 years.

The interest on the bonds will be fixed the first 2-years at 5% and thereafter will be flexible at Base plus 1% in the years 3-5 and then a spread of Base plus 1.875% in the years 6-10. Interest will be paid every six months.

The total capital of the CDB end of 2004 amounted to CYP 17.1 mln.