London firm praises Cyprus ESG bond

London-based firm Global Capital, which specialises in international capital markets, hailed Cyprus’ sustainable bond issuance of €1 billion in April 2023 as the top public-sector green and social bond for the year, according to their recently released report reviewing 2023 and providing an outlook for 2024.

This Cypriot sustainable bond was recognised as the “SSA (Sovereign-Supranational-Agency) ESG (Environmental/Social/Governance) Bond of the Year 2023,” marking a remarkable achievement for the country’s debut in the ESG bond sector.

“Few bond issuances generate as much interest as a country’s maiden ESG issuance, and Cyprus stole the spotlight in this area in 2023,” commented Global Capital. The report highlighted that Cyprus, rated BBB, took the long-awaited step of issuing its first ESG bond in April.

During the same period, joint issuances were launched by Italy and Greece, while Luxembourg and Slovenia also issued their sustainable bonds. Despite the competitive landscape, Global Capital stated that “Cyprus’ 10-year bond issuance was a glaring success”.

Moreover, the offering book for this issuance was the largest since 2014 when Cyprus re-entered the international capital markets. The report also noted that the bond was priced at the estimated fair value, surpassing expectations.

Global Capital also praised the issuer’s strategic planning and ambition regarding ESG matters.

“Despite the limited demand for ESG-related issues compared to larger issuers, Cyprus aims to maintain a steady presence by issuing an ESG bond every 2 or 3 years,” the report said.

“There couldn’t have been a better way for Cyprus to kickstart this journey than with this remarkable inaugural issuance,” it added.

In response, Cyprus’ Ministry of Finance hailed this recognition as “particularly important” as it demonstrates the level of work undertaken in public debt management and, importantly, the estimation that international capital markets (institutions, banks, investors) hold for Cyprus as an issuer.

What is more, the Public Debt Management Office extended gratitude to the two banks, HSBC and JP Morgan, that served as structuring agents for this issuance.

Lastly, the Finance Ministry congratulated all public officials across various ministries, departments, and services involved in this effort, acknowledging that without their systematic contributions and professionalism, none of this would have been possible.