Outstanding central government debt reached €19,014 million (€19.01 billion) at the end of June, compared with €19.15bn in June 2014.

This is equivalent to 108.6% of GDP in 2014 according to our calculations, compared with 109.4% of GDP in the same period of the previous year.

Domestic debt accounts for just 26% of the total, with foreign market debt accounting for 74% of the remainder.

The debt stock was higher at the end of June 2015 than at the end of March (€18.50bn), however, owing to the €1bn international bond issued in May.

This offset the early and partial repayment of €750m of the ‘Laiki bond’ to Bank of Cyprus in June and the repayments of domestic bonds totalling €43m.

The €1bn Euro Medium Term Note (EMTN) was issued with a maturity of seven years, a coupon of 3.875% and a yield of 4.00%. Buyers were mainly asset managers (45%) and hedge funds (40%).

Cyprus also received €278m from the fifth, sixth and seventh tranches from the International Monetary Fund in June 2015, while six-year bonds issued to residents under the retail bond programme reached €33m in the second quarter.

Government borrowing costs have been falling. The weighted average yield in the 13-week Treasury Bill auctions dropped to 2.31% at the end of the second quarter from 2.84% at the end of the previous quarter.

The yields on the newly introduced 30-day T-bill auctions in May and June were 1.81% and 1.75% respectively.

The government paid back €709m in short-term debt (T-bills) in the second quarter and had €736m of outstanding T-bills at the end of June, up from €696m at the end of March. This normally indicates an expansion of the budget deficit.

Source: InCyprus