Cyprus Mail
Business Cyprus

Cyprus bond yields drop following sovereign upgrade

Cypriot bond yields fell sharply on Monday after Standard and Poor’s rating agency upgraded the island’s sovereign bond to investment grade, more than six years after it had been downgraded into ‘junk’ territory.

S&P lifted Cyprus’s rating to BBB- from BB+, citing brighter growth prospects and consolidation in the banking sector.

To take advantage of the positive sentiment following the upgrade, the government mandated banks to sell a 10-year bond.

The investment-grade rating makes Cyprus eligible for ECB bond purchases.

To qualify for quantitative easing, a country needs at least one investment grade rating from S&P, Moody’s, Fitch or DBRS.

All the latter three still rate Cyprus below investment grade.

Yields — the amount of return an investor realizes on a bond — on Cyprus’s five-year bonds slipped as low as 0.83 per cent before trading just above one per cent at the close.

“The Cyprus upgrade adds to the positive picture in the periphery,” said Commerzbank rates strategist Rainer Guntermann.

 



Related posts

Fraud suspect wanted by Russia arrested in Limassol

Elias Hazou

Laws passed against sexism, and bullying in schools

Elias Hazou

House passes animal welfare law, beefs up protections and fines  

Gina Agapiou

Coronavirus: one death, 220 new cases announced on Thursday (Update)

Elias Hazou

Coronavirus: one death, 220 new cases announced on Thursday

Elias Hazou

European Parliament denounces Turkish side’s decision to open Varosha

Elias Hazou