Cyprus Mail
Cyprus

Secondary market yields drop following latest bond issue

Cyprus, which saw the secondary market yields of outstanding securities drop considerably over the past six months, witnessed a further strong decline on Monday, days after the issue of the latest government bond.

The yields of the government bond maturing in November 2025 fell on Monday to 2.75 per cent from 2.86 per cent on Friday, according to a Bank of Cyprus document seen by the Cyprus Business Mail.

The drop in secondary market yields is an adjustment reflecting the 2.8 per cent average yield of the 7-year €850m government bond issued on Tuesday, a market participant said in a telephone interview on Monday.

This security, with an annual interest rate of 2.75 per cent, was traded at price of €102.015 on Monday morning, which translates to an annual yield of 2.43 per cent, according to the Bank of Cyprus document.

While the decline in yields is not seen as an invitation to issue government bonds with longer maturities, should the government opt to do so “they would help,” the source said.

The reduction in secondary market yields excluded other securities maturing over the next few years which have been the targets of recent buybacks.

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