Local
articles | 29 May 2015

Cyprus to offer lower-rate retail bonds

The government will kick-start the 9th series of retail bonds from September 1, 2015, but will take advantage of the stabilising economy by offering the bonds at lower interest rates than before.

Applications for the bonds will be accepted between August 2 and 20.

Retail bonds are designed for individuals (natural persons). They have a maturity of six years but come with the possibility of early repayment with 30 days’ notice.

Interest rates payable increase depending on how long the buyer keeps the bonds.

However, the interest rates payable on the 9th series will be lower than in the earlier series.

Retail bonds redeemed within 24 months will pay a rate of 2.50%–the same rate as in the earlier series.

However, those redeemed between 24 to 48 months will pay 2.75%, compared with 3.25% for 24-36 and 4.25% for 36 to 48 months previously.

Those redeemed between 48 to 60 months will pay 3.00%, down from 5.25%, while those of between 60 and 70 months will be sold at a rate of 3.25%, compared with 5.5% for the previous series.

The Ministry of Finance noted that these rates to not affect the interest rates on bonds already sold.

Current rates will also apply for the 7th and 8th series. Requests for the 7th series will be taken from June 2 to June 19, with an entry into force of July 1, 2015, and for the 8th from July 1 to 20, with an entry into force of August 3.

Source: InCyprus

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