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Cyprus to borrow €1.25bn from international markets in 2020

Cyprus’ financing needs for 2020 to be covered by bond issuances in the international capital markets amount to €1.25 billion, the Finance Ministry’s Public Debt Management Office (PDMO) has said.

In an investor presentation, PDMO said that Cyprus` total financing needs for 2020 amount to €1.7bn and will be covered by an EMTN issuance amounting to €1.25bn, €0.3bn in domestic treasury bills.

Financing needs include the early repayment of the loan Cyprus obtained from the International Monetary Fund during the 2013 financial crisis amounting to €0.7bn.

The PDMO did not clarify whether the €1.25bn would be garnered in one or two EMTN issuances, noting however that “the majority of financing is expected to be completed in the first quarter of 2020.”

According to PDMO data, Cyprus’ general government debt declined to €21.3bn or 99 per cent of GDP at the end of September, and it is estimated to decline to 97.4 per cent by the end of 2019 and will continue its downward trajectory in the coming years and fall to 81 per cent in 2022.

The PDMO added cash buffers at year end to cover the financing needs of the first nine months of 2020 and respectively of 2021.

Furthermore, PDMO announced that the central government’s debt which correspond to 99 per cernt of Cyprus’ debt declined to €21.10bn at the end of September, marking a reduction of €1.7bn compared with the end of June, mainly due the early repayment of the loan Cyprus obtained from the Russian Federation in 2011.

Forty per cent or €8.4bn of Cyprus’ debt are loans, of which €6.3bn was granted by ESM during the crisis, while EMNT bonds amounted to €8bn or 38 per cent of Cyprus’ debt, followed by domestic bonds with €3.48bn or 16.5 per cent of total debt.

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