…Massive over-subscription for Cyprus bonds
A multiple bond auction held by the Central Bank of Cyprus on behalf of the government was heavily over-subscribed, with the 10-year bond yield moving back above the comparative German bund yields.
The 2-year bond yield however, remained below the German bund yields indicating uneasiness in the bond market ahead of the ECB rate meeting scheduled for August 3, where a 0.25% rate hike is expected, which may have a major impact on how the Cyprus Central Bank next moves on interest rates. The Cyprus Monetary authorities left interest rates unchanged during their scheduled meeting on Friday.
For a total of CYP 260 mln worth of government paper on offer, the Central Bank was flooded with bids totaling CYP 670.96 mln, as all four issues were over-subscribed, with most of the interest centered on the shorter term T-bills.
During the 2-year bond auction, the Central Bank tendered up to CYP 50 mln of 3.75% bonds maturing in 2 years. The total value of the bids submitted was CYP 142.328.600. The total value of bids accepted was CYP 50 mln at the weighted average price of CYP 100,45 per CYP 100 nominal value representing an annual yield of 3.51%, up from the 3.32% yield agreed at the previous auction held on May 31.
During the auction for the 4.50% bonds maturing in 10-years for up to CYP 60 mln, the Central Bank received a total value of CYP 74.00 mln bids, of which CYP 60 mln were accepted at the weighted average price of CYP 101,80 per CYP 100 nominal value representing an annual yield of 4.28%, up from the 4.03% yield agreed during the previous auction held on May 31.
T-bills
During the auction of up to CYP 75 mln Treasury Bills with 52 weeks maturity, the total value of the bids submitted was CYP 244.628.000 of which CYP 75 mln were accepted at the weighted average price of CYP 971,98 per CYP 1.000 nominal value representing an annual yield of 2.89% compared to 2.92% agreed at the previous auction held on March 29.
During the auction for up to CYP 75 mln T-bills maturing in 13 weeks, the Central Bank received a total of CYP 244.63 mln bids of which CYP 75 mln were accepted at the weighted average price of CYP 993,66 per CYP 1.000 nominal value representing an annual yield of 2.56%. The yield on the 13-week T-bill is lower than the yield agreed at the previous auction held on January 30, at 2.67%.
