Cyprus Sets Sights on Entering New Markets After Early Loan Repayment

The Cyprus Finance Ministry have released government plans about the islands preparations to enter international markets with a new euro-denominated bond issue, following early repayment of their loans to Troika.

The plans involve organising a series of fixed income investor meetings with the following lenders:

  • HSBC.
  • DBRS.
  • CITI.
  • Goldman Sachs.

Cyprus plans to benefit from the current mania surrounding fixed income assets in the current climate, as Central Banks cooperative monetary policies are also taking advantage of optimistic and forerunning investor appetite as demonstrated in member states such as Greece, Italy and Spain. Who have all shown a large increase in interest in bond issues, despite their somewhat lackluster economies.

Additionally, the islands planned market exit comes after months of early repayments starting from late 2018 using the islands cash reserves it will have as a result of selling off a large portion of their non-performing loans. Cyprus’s cash reserves at the fiscal end-2018 amounted to EUR €1.38 billion.

According to recent data, the Ministry of Finance fully paid loans totalling EUR €1.3 billion to the Central Bank of Cyprus and Cyprus Cooperative Bank according to the terms of their bailout agreement.

The forthcoming issue will target the Public Debt Management Office to cover Cyprus’ refinancing needs for 2019, covering financing needs for the next nine months primarily.

In a statement, the ministry included Cyprus’ most recent creditworthiness and stability rankings. Please find the following results in the table below:

Ranking Agency  Cyprus 2018-2019 Rating
 Standard and Poor`s   BBB- (stable)
 Ba2   Stable
 Moody`s  BBB- (stable)
 Fitch Ratings  BBBL (stable)

 


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