FINANCE: Cyprus to tap bond markets to repay Russian loan

Cyprus has mandated major investment banks to manage a double bond issue comprising a 5-year and a 30-year euro denominated bonds to pay off a Euros 2.5 bln Russian loan.

Finance Minister Harris Georgiades recently said the government is considering an early repayment of the loan it obtained in 2011 from Moscow. The loan’s outstanding amount is Euros 1.57 billion.

The Republic of Cyprus, rated BBB- (stable) by Standard and Poor’s, Ba2 (stable) by Moody’s, BBB- (stable) by Fitch and BBBL (stable) by DBRS, has mandated BARCLAYS, DEUTSCHE BANK, GOLDMAN SACHS INTERNATIONAL, J.P. MORGAN, MORGAN STANLEY and SOCIETE GENERALE to lead manage a EUR-denominated dual-tranche RegS, CACs benchmark, the Finance Ministry statement said on Tuesday.

The deal comprises a EUR benchmark December 2024 fixed rate tranche and a EUR benchmark May 2049 fixed rate tranche. The issue is expected to be launched in the near future subject to market conditions, it added.

Funds raised from the debt issuance might be enough to fully repay the Russian loan.

The 30-year bond is the longest maturity in Cyprus’ history after Nicosia issued a 15-year bond earlier this year.

Source: The Financial Mirror