Cyprus considers issuing Euros 0.5 billion bond for cash accumulation in 2017

Cyprus is considering tapping international capital markets with an EMTN issuance in the region of Euros 0.5 billion to maintain cash reserves to cover financing needs of 2018, the Finance Ministry said in the Stability Programme for 2017 � 2020.

According to the Ministry, Cyprus total financing needs of 2017 are estimated at Euros 1.2

billion, of which 67% relates to debt redemptions and 33% concerns cash accumulation for pre- financing of 2018.

Cyprus is considering accessing the international market over 2017 with one benchmark new bond subject to market conditions in order, primarily to maintain cash reserves to a level sufficient to pre-fund the 2018 financing needs and, secondly, to enhance its re-established market presence, the Finance Ministry said, adding the expected issuance volume will be of the order of Euros 0.5 billion.

According to the Public Deb Management Office, the central governments cash buffer amounted to Euros 994 million end-2016.

The size of the cash buffers are sufficient to cover the financing needs for the following 12-month period, the Ministry added.

Furthermore, for 2017 the Finance Ministry has issued a domestic seven-year bond of Euros 0.3 billion

in January, while domestic Treasury Bill auctions are expected to provide on an annual basis Euros 0.3

billion in order to roll over last year’s stock.

The annual financing will be completed through proceeds from the domestic retail bond and disbursements by the European Investment Bank for ongoing infrastructure projects, the Ministry noted.

Cyprus general government debt is expected to increase marginally to Euros 19.4 billion or 104% of GDP, factoring a projected 2.9% growth rate.

Public debt in 2016 amounted to 107.8% from 107.5% in 2015, as a result of the accumulation of cash reserves.

In absolute terms, general government debt remained broadly unchanged in the last two years reaching to about Euros 19.3 billion at the end of 2016 from Euros 19.0 billion in 2015.

According to the Finance Ministry, public debt is expected to follow a downward trajectory and decline 88.8% of GDP in 2020.

Source: Cyprus News Agency