The Bank of Cyprus (BoC) on Thursday announced that on September 10, 2025, it successfully launched and priced an issue of €300 million unsecured and subordinated Tier 2 Capital Notes under its €4 billion Euro Medium Term Note Programme.

“The transaction was highly successful due to the strong interest from investors,” the bank said in a statement.

The issue received demand from more than 100 institutional investors, with the final order book exceeding €3 billion and more than ten times oversubscribed.

“This demand demonstrates the confidence of foreign and local investors in the Bank of Cyprus,” the bank added.

Due to the strong demand, the final pricing was set at a spread of 195 basis points, 35 basis points tighter than the initial price indication, resulting in a yield of 4.321 per cent, compared to the initial indication of 4.67 per cent.

“The pricing margin is significantly better than the bond we are refinancing and even lower than the most recent Senior Preferred bond issuance,” the bank said, adding that it is “at the same or even better levels than Greek bonds”.

The New Notes were priced at 99.632 per cent with a fixed coupon of 4.25 per cent per annum, payable annually in arrears, and will reset on September 18, 2031.

The maturity date of the New Notes is September 18, 2036, the announcement added.

The company will have the option to redeem the New Notes early on any day during the six-month period commencing on March 18, 2031, and ending on September 18, 2031, subject to regulatory consents and conditions to redemption.

Settlement of the New Notes is expected to occur on September 18, 2025.

The New Notes have been rated Ba1 by Moody’s Investors Service Cyprus Limited.

They will be admitted to the official list of the Luxembourg Stock Exchange and traded on its Euro MTF market.

The proceeds of the issue will be on-lent by the Bank of Cyprus Holdings to its subsidiary the Bank of Cyprus Public Company Limited and will be used by the bank for general funding purposes.

The on-loan is intended to qualify as Tier 2 capital for the bank.

The issuance will maintain the group’s optimised capital structure and contribute around 300 basis points to the group’s Total Capital Ratio.

In addition, the company confirmed that following its announcement on September 9, 2025, it has invited holders of its outstanding €300 million Fixed Rate Reset Tier 2 Capital Notes callable between April 23, 2026, and October 23, 2026, to tender their notes at a purchase price of 102.3 per cent of the principal amount.

“The bank has also announced its intention to buy back the existing subordinated bond maturing in 2031 at a price of 102.3 per cent,” it said.

BofA Securities Europe SA and Goldman Sachs Bank Europe SE acted as Global Coordinators and Structural Advisers.

They were joined by Barclays Bank Ireland PLC, Citigroup Global Markets Limited, and Morgan Stanley Europe SE as Joint Lead Managers, while the Cyprus Investment and Securities Corporation Limited (CISCO) acted as Co-Manager.