The Republic of Cyprus, went to market on 4 April 2023 with a EUR 1bn inaugural Sustainable 10-year fixed-rate benchmark transaction closing with a final demand over EUR 12.1bn and an annual 4.125% interest. According to the Ministry of Finance Public Debt Management Office, this represents the largest orderbook achieved in a single-tranche syndicated transaction by the Republic of Cyprus since the sovereign’s return to the international bond markets in June 2014. At the same time, it is also the second largest orderbook on record for a Sustainable benchmark issued by a Eurozone sovereign. The 10-year Sustainable bond was priced with a reoffer spread of m/s+125bp, equivalent to a reoffer yield of 4.219% and a spread of +189.6bp vs. the DBR 2.3% Feb-33. The annual nominal interest rate of the bond is 4.125%. The joint lead managers of this transaction were Barclays, HSBC, J.P. Morgan, Morgan Stanley and Société Générale. Furthermore, HSBC and J.P. Morgan assisted the Republic of Cyprus as joint structuring agents. The listing is in London under English law and is launched off the issuer’s EMTN programme. The Republic of Cyprus’ inaugural Sustainable 10-year benchmark attracted orders from a diverse array of high-quality investors. With regard to the geographical distribution, 80% of orders came from international investors. Of these participants, the highest proportion originated from the United Kingdom. In terms of investor type, the majority of participants were fund managers and banks/ private banks. The statement notes that ‘the Republic of Cyprus has placed sustainability at the heart of its Recovery and Resilience Plan (2021-2026) with the key strategic goal to strengthen the economy’s resilience and the country’s potential for economically, socially and environmentally sustainable long-term growth and welfare’. At the same time, the Republic of Cyprus intends for sustainable borrowing under Green/Social/Sustainable Instruments to complement the objectives of the Recovery and Resilience Plan.
Source: Cyprus News Agency