Keravnos says record demand proves faith in Cyprus economy

Cyprus secured record-breaking investor demand when it issued a €1 billion 10-year government bond on January 21, according to Finance Minister Makis Keravnos and detailed data released by the Public Debt Management Office.

In statements made on Thursday, the minister described the €16.50 billion in total offers as a historic milestone.

“The Republic of Cyprus asked for offers of €1 billion and received offers of €16.5 billion,” he said. “This is a historic event.”

“For the first time there has been such strong appetite to invest in a bond of the Republic of Cyprus,” he added.

“It was a very successful issuance, with a very low interest rate of 3.25 per cent, the lowest among all recent sovereign issues,” Keravnos stated.

He pointed to recent bond issuances by Greece, Portugal and other countries, stressing that Cyprus achieved the most favourable pricing.

“This confirms the recognition by foreign investors of the sound economic policy implemented by our government, which creates conditions of economic stability and security for investors,” he said.

He added that the government remains committed to this policy path, which safeguards future growth and enables positive outcomes to be transferred to society.

“This is not additional debt, it is the replacement of debt that is maturing,” he said, responding to questions.

He recalled that public debt has already been reduced to around 55 per cent of GDP, even though the target had been 60 per cent by the end of the year.

“We achieved this in 2025,” he said.

“This is a significant development because it creates scope for increased spending on development projects and social policy,” he added.

According to the Public Debt Management Office, around 80 per cent of total demand came from international investors for the 10-year benchmark bond issued on Wednesday.

The office said this was the first syndicated transaction since Cyprus regained an ‘A’ credit rating from all major rating agencies, attracting a broad range of high-quality real money investors.

Almost 80 per cent of allocations were made to foreign investors, with the largest share coming from the United Kingdom at 43.5 per cent.

This was followed by Scandinavian countries with 14.0 per cent, Portugal with 9.7 per cent, Germany and Austria with 4.6 per cent, France with 2.5 per cent, the Netherlands with 1.6 per cent and Italy with 1.6 per cent.

By investor type, asset managers accounted for 53.8 per cent of participation, followed by banks with 25.8 per cent, insurance and pension funds with 8.1 per cent, and central banks and official institutions with 7.8 per cent.

The bond was priced at mid-swaps plus 44 basis points, corresponding to a reoffer yield of 3.339 per cent and a spread of plus 51.0 basis points versus the DBR 2.6 per cent August 2035.

The transaction was led by Barclays, J.P. Morgan, Morgan Stanley and Société Générale, while the Bank of Cyprus acted as co-manager.

The new bond will be listed on the London Stock Exchange under English law through the Republic of Cyprus EMTN programme, with ISIN XS3281842578.

The Public Debt Management Office said that on January 20, 2026, at 10.30 London time, Cyprus announced its intention to return to the market with a new 10-year benchmark bond maturing in January 2036, subject to market conditions.

This marked the first new syndicated deal since June 2024 and the first new 10-year benchmark bond since April 2023, enhancing liquidity at a key point on Cyprus’ yield curve.

“Following strong investor participation and constructive overnight feedback, the Republic of Cyprus officially opened the order book for the new €1 billion 10-year benchmark bond the next morning at 08.27 London time, with initial price thoughts in the area of mid-swaps plus 52 basis points,” the announcement said.

“The transaction attracted strong investor interest from the outset and by 10.00 London time the order book exceeded €14.50 billion, excluding joint lead manager interest, with price guidance revised to the area of mid-swaps plus 47 basis points,” it added.

The momentum in the high-quality order book continued throughout the morning, allowing Cyprus to tighten the spread by a further 3 basis points to mid-swaps plus 44 basis points.

The final order book closed with total demand exceeding €16.40 billion, excluding joint lead manager interest.

“This represents the largest order book achieved in a syndicated transaction by the Republic of Cyprus, surpassing the previous record set in 2023 with the Sustainable Bond,” the announcement said.

At 13.50 London time, the bond was officially priced at mid-swaps plus 44 basis points, corresponding to a reoffer yield of 3.339 per cent and a spread of plus 51.0 basis points versus the DBR 2.6 per cent August 2035.

Before the announcement, the lead managers had identified fair value for the new bond in the low mid-swaps plus 40 basis points area.

“From this perspective, the transaction was priced with a minimal new issue concession, which, combined with the record demand received, is proof of the continued strong support from the international investment community for the Republic of Cyprus, underpinned by its solid economic fundamentals and positive rating trajectory,” it said.