Fixed Income  

Cyprus returns to market with 5-year €750m bond

Cyprus has issued a new five-year bond just over a year after the country was racked by a banking crisis, in the latest sign of returning investor confidence in the eurozone periphery, reports FastFT.

The €750m bond, to yield 4.85 per cent, matures in June 2019, reports the FT’s Thomas Hale.

Cyprus was hit early last year by a banking collapse, ultimately leading to a €10bn bailout from the International Monetary Fund, European Central Bank and European Commission.

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The issuance comes as Cyprus’s economy shows signs of improving.

Rating agency Standard & Poors upgraded the country’s credit rating to B after its economy shrunk 5.4 per cent last year – less than the IMF had expected.

In issuing its first bond since its financial crisis, Cyprus is following in the footsteps of fellow bailout recipient Greece. In April this year, Greece raised €3bn through a 5-year bond which priced at 4.95 per cent.

The ECB this month loosened its monetary policy - cutting interest rates and introducing a charge on overnight deposits - so driving down bond yields across the eurozone.