Cyprus Yields €1.75 Billion from Low-Interest Bonds and Pays Off a Debt Early
Cyprus has boosted its investment credibility by paying off part of an International Monetary Fund (IMF) loan ahead of schedule. The loan in question is the €10 bln rescue package provided to Cyprus in 2013.
The country repaid the loan with a low-interest double bond that yielded €1.75 bln: €1 bln from a 10-year bond issued at 0.73%, €750 from a 20-year bond issued at 1.33%. The total value of the asset surpassed €13 bln making it the largest bid of a kind in the financial history of Cyprus.
Cyprus’ officials report that the bond issues address most of the countries needs for 2020 and ensure €15 mln savings in IMF interest payments.
Cyprus is still subject to a higher interest compared to many EU member states. Cyprus’ debt is the fifth highest in the eurozone. Yet most experts believe that the Cypriot government made the right move capitalising on the current low-interest rates globally. Cyprus’s ability to receive long-standing loans is indicative of its active position in the international market.
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