The Republic of Cyprus has drawn offers totalling €9.6 billion from international markets for its newly issued 7-year bond worth €1 billion, according to a report released on Wednesday by the Cyprus News Agency (CNA). The book of offers has now closed.

Initially, the book opened with guidance from the issuance advisors set at 60 basis points above the benchmark rate (mid-swaps).

However, as the book of offers approached €7 billion, the guidance narrowed to 55 basis points above the benchmark rate, with the yield settling at 3.295 per cent. The final pricing is expected to be announced later.

Alongside the new bond issuance, a capped offer was announced for the early repayment of up to €500 million from an existing bond worth €1.5 billion, which carries an interest rate of 2.375 per cent and matures in September 2028. The repurchase price is set at 98.4 per cent of the original amount.

The Finance Ministry’s decision to initiate an early repayment offer for the 2028 maturing bond is seen as strategic, as that year represents the largest debt maturity. This particular bond has the highest outstanding amount of €1.5 billion.

According to the annual report of the Public Debt Management Office for 2023, the year 2028 sees the highest annual debt maturities totalling €2.8 billion.

Of this amount, €1.5 billion, which corresponds to approximately 53 per cent, relates to the repayment of EMO, while €1.29 billion, a share of around 46 per cent, is allocated to loan repayments, primarily the fourth instalment to the European Stability Mechanism.