articles | 12 January 2017

Bank of Cyprus issues T2 bond at 9.25%

Bank of Cyprus is (BoC) issued a €250m bond recently, the first issue of debt since the bail-in (haircut) of depositors in 2013.

The interest rate on the 10-year, Tier 2, 10-year non-call subordinated bond was offered at a very attractive 9.5%.

“The issuance of the Notes is part of the Bank’s strategy to optimise the level and composition of its capital and liabilities, with a positive impact of approximately 130 basis points on the Bank’s total capital ratio,” BoC said in a statement.

The notes will be listed on the Luxembourg Stock Exchange’s euro MTF market and will mature on January 19, 2027. The bank said it will have the option to redeem the notes early on January 19, 2022, subject to applicable regulatory consents.

“The Bank’s successful return to the debt capital markets demonstrates the confidence of international investors in the Bank,” said BoC Chief Executive Officer John Hourican.

“This is a further step in the normalisation of the Bank’s funding structure, following the recent full repayment of Emergency Liquidity Assistance.”

In early January BoC repaid the last of its €11.4bn Emergency Liquidity Assistance acquired during the Cyprus financial crisis. The repayment of ELA will allow the bank to start paying dividends.

Meanwhile BoC is preparing to list on the London Stock Exchange this coming Thursday January 19.

Previous shares were already suspended from trading on the Cyprus Stock Exchange and the Athens Stock Exchange on January 10.

The new shares will be listed in London and Nicosia but no longer in Athens.

Source: InCyprus

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