Nicosia, Cyprus. Cyprus attracted record investor demand after issuing a €1 billion 10-year government bond on January 21, according to Finance Minister Makis Keravnos and data from the Public Debt Management Office. Total offers reached €16.5 billion.
Record demand and pricing
Keravnos described the €16.5 billion in total offers as a historic milestone, saying the Republic of Cyprus sought offers of €1 billion and received €16.5 billion. He said it was the first time there had been such strong appetite to invest in a Republic of Cyprus bond.
Keravnos said the issuance carried an interest rate of 3.25%, which he described as the lowest among recent sovereign issues. He referred to recent bond issuances by Greece, Portugal and other countries, and said Cyprus achieved the most favourable pricing.
Economic policy and debt profile
Keravnos said the outcome confirmed foreign investors’ recognition of the government’s economic policy, which he said creates conditions of stability and security for investors. He said the government remains committed to this policy path, which he said safeguards future growth and enables positive outcomes to be transferred to society.
Responding to questions, Keravnos said the issuance did not add to debt but replaced debt that is maturing. He said public debt had already been reduced to around 55% of GDP, compared with a target of 60% by the end of the year.
What do you think record demand for Cyprus’s 10-year bond signals about investor confidence in the country’s economic outlook?