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Following roadshow presentations during
the week beginning February 4, €550 million
of 10-year Euro-bonds were issued by the Republic
of Cyprus Government on February 12.
The
“roadshow%26rdquo; had culminated with
presentations by the Minister of Finance, Mr
Takis Klerides, in Frankfurt and London last
week. Interest by investors in taking up the
Cyprus Eurobonds was very strong from a wide
geographical distribution of investors in Europe
and gathered great momentum in the last days of
the roadshow. Indeed, the bond issue was
substantially oversubscribed, and the primary
issue has been sold on favorable terms, allowing
the Government to borrow at relatively low
interest rates. The very good credit rating of A+
assigned by the Fitch credit rating agency in
early February had obviously stimulated much
interest in investing in Cyprus.
The Cyprus bonds
were priced at 41 basis points above the Euribor
swap rate; the previous 7-year €280 million
issued in June 1999 had a spread of 74 points
above Euribor. The coupon interest rate on the
new bond is 5,5% per annum, the lowest-ever for a
EU-candidate country.
The proceeds of the
new bond issue will be used to repay the US$300
million bond maturing in June 2002 and to finance
projects of the local authorities. |
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