The yields of today’s seven-year government bond issue dropped to below 2.8 per cent, two sources with knowledge of the affair said.
The government, which aimed at tapping up to €800m from the market to smooth out maturing debt, was surprised with market response in London as the issue was “oversubscribed several times,” one of the sources said.
By comparison, in July last year, roughly a month after the Brexit referendum in the UK, Cyprus issued a bond at an average yield of 3.8 per cent.
On Tuesday, the bond was traded on the secondary market at an average yield of 2.53 per cent, according to a Bank of Cyprus document seen by the Cyprus Business Mail. The yield of the government bond maturing in November next year was at 2.89 per cent.
Finance Minister Harris Georgiades is likely to announce the results of the issue later today in his address at the general meeting of the Association of Cyprus Banks in Nicosia. The Cyprus Business Mail understands that Cypriot banks participated in today’s auction.
On Monday, the finance ministry said that it intended to swap receipts with three bonds maturing in 2019 and 2020.