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articles | 28 June 2013

EU and IMF welcome Cyprus voluntary debt exchange

The European Commission (EC) and the International Monetary Fund (IMF) in a joint statement issued on Thursday welcomed the announcement made by the Cypriot authorities to launch a voluntary debt exchange of Cypriot sovereign bonds.

“We welcome today’s announcement by the Cypriot authorities to launch a voluntary debt exchange of Cypriot sovereign bonds with a total nominal value of €1,0 billion and maturing within the economic adjustment program period (2013-Q1 2016), for new bonds with the same coupon rates and 5‒10 year maturities”, the statement notes. It adds that “the objective of this liability management operation is to facilitate cash-flow management for the government and to ensure adequate funding at terms that support long-term public debt sustainability, an essential step towards Cyprus’s economic recovery”.

It further says that “the transaction is fully in line with the country’s previously announced commitment to roll over €1 billion of government debt held by domestic investors at existing coupon rates and extended maturities”, stressing that “once this transaction is completed, the refinancing commitment undertaken by the Cypriot authorities in support of the adjustment program would be fulfilled”. “We reiterate our commitment to stand by Cyprus in partnership and to support its return to growth and prosperity” the institutions concludes in the statement.

Source: Financial Mirror

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