“Such a move, if decided, would be of equally decisive and strategic importance,” Georgiades said speaking to the press on Sunday.
On Thursday, Cyprus returned to the capital markets 15 months after it entered a €10 billion financial adjustment programme and three years after its exclusion from bond markets raising €750 million in a 5-year bond with a yield of 4.75%. The capital raised will be allocated to the redemption of domestic bonds held mainly by Bank of Cyprus.
Severely hit by soaring non-performing loans, the Cypriot banks along with the other banks in the Eurozone are preparing for a stress-test exercise by the European Central Bank and the European Banking Authority. Experts say that the Cypriot banks should raise capital to cover possible capital shortfalls ahead of the stress tests. Sources say that, Bank of Cyprus, the island’s largest lender, is preparing for a capital raise in the region of €500 million.
“Banks on a European level are currently trying to strengthen their capital, utilizing the solid investment interest noted internationally,” the Finance Minister said replying to a question.
Furthermore, responding to a question, Georgiades said last week’s bond issue was not an isolated nor a one-off move but “part of a broader planning towards the restoration of Cyprus’ credibility and its ability to finance its needs.”
Fitch rating agency noted that Cyprus' return to the market is positive, noting however, “It is not certain that market access will be permanent.”
Cyprus’ return to the markets, he concluded, “would not be permanent if we relax our efforts and if we return to the attitudes of procrastination and dithering. The return to the markets will be permanent if we continue to press on with the reform and consolidation of the economy.”
Source: Famagusta Gazette