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Fund Managers take the lion’s share in Cyprus’ double bond issue 

April 26, 2019 at 8:44am
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Fund Managers took the lion’s shares in this week’s double EMTN bond amounting to €1.25 billion by Cyprus, comprising a 5-year EMTN note and a landmark 30-year note.

According to data released by the Finance Ministry’s Public Dent Management Office (PDMO), the transaction attracted offers exceeding €11 billion (€4.8 bl for the 5-year and €6.3 bl for the 30-year), which constitutes a new record demand for Cypriot bonds since the island’s return to international capital markets in 2014.

As far as the bonds’ pricing is concerned, PDMO notes that the analysis shows that the 5-year was priced (Coupon 6.25% and yield 0.673%) at fair value, while the 30-year bond (2.75%/2.83%) offers investors approximately 5 basis points above its theoretical fair value in the secondary markets.

According to PDMO, while the 30-year bond issue was the longest ever bond issued by Cyprus, the 5-year bond represents the lowest ever the lowest yield and lowest coupon of any syndicated transaction by Cyprus.

Yesterday’s double bond issue attracted offers from an especially high quality and diversified range of investors, the PDMO said.

According to the data, more than 92% of the offers for both bonds came from investors abroad with the majority coming from the region of Germany/Austria/Switzerland with 33.7% for the 5-year issue and 26.8% for the 30-year bond issue followed by the United Kingdom with 19.4% and 21.7% respectively. Investors from Cyprus amounted to 6.2% and 7.1% respectively.

Fund managers were the majority of interested investors with 60% of the 5-year bond transaction and 55.1% of the 30-year, followed by Banks and private banks with 18.6% and 21.7% respectively and hedge funds with 9.7% and 8.7% respectively, the PDMO said.

(Cyprus News Agency)