Cyprus to issue new 30-year bond to repay remaining Russian loan

Source: Xinhua| 2019-04-24 03:36:56|Editor: yan
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NICOSIA, April 23 (Xinhua) -- Cyprus is to issue a new 30-year bond with a view of an early repayment of the remaining part of a 2.5-billion-euro (2.8 billion U.S. dollars) loan obtained from Russia, the Ministry of Finance said on Tuesday.

The Ministry said in a statement that Barclays, Deutsche Bank, Goldman Sachs, Morgan Stanley and Societe Generale have been appointed as managers of the issue.

Finance Minister Harris Georgiades said last week that the move was aimed at securing cheap money, taking advantage of favorable market conditions.

Cyprus's 10-year bond yields dropped to 1.37 percent last week, the lowest point since 2015.

The Russian loan, obtained in 2011 ahead of the 2013 financial crisis and bailout of the eastern Mediterranean island, amounted to 2.5 billion euros and initially carried an interest of 4.5 percent.

At the time, the Cypriot government had turned to Russia for financing its operations, as it resented applying for a bailout agreement with the Eurogroup and the International Monetary Fund to whom it finally turned for help in June, 2012.

Part of the loan has been repaid and the remaining amount of 1.57 billion euros was rescheduled as part of the 2013 bailout to mature in 2021, at an interest of 2.5 percent.

Georgiades said that his ministry will shortly made announcements on a move to tap international financing markets for a new issue of bonds to exploit favorable market conditions.

Finance Ministry sources quoted by state radio said the aim of the bond issue was to raise 1.2 billion euros, added that the amount may be raised depending on the interest.

The sources said it was the first time Cyprus would issue a bond maturing in 30 years.