This is the island’s first international debt issue since a bailout rescued it from bankruptcy a year ago in March 2013.

The Finance Ministry said the bond carried a coupon of 6.50% and was launched under Cyprus’ borrowing facility with its creditors known as the European Medium Term Note (EMTN) programme.

The bonds will be listed on the London Stock Exchange and settled via Euroclear, the settlement system for securities transactions, the ministry said.

Proceeds from the transaction will be used for public debt management, including government financing, it added. Access to the eurobond market was taking place via its updated EMTN programme.

The facility has not been used since before Cyprus was effectively shut out of international financing markets in May 2011 because of a spike in yields on its benchmark bonds. Yields have since fallen to about 5% from more than 14%.

“The Ministry of Finance will continue assessing market conditions and options as part of the broader strategy aiming towards the full restoration of market access,” it said.

Cyprus was bailed out with €10 billion in aid from the European Union and the International Monetary Fund in March 2013, crumbling under the pressure from market exclusion and a banking system heavily exposed to Greece.

Last week, credit ratings agency Standard and Poor’s raised its long-term rating on Cyprus to B from B-, after the euro zone member state gained plaudits from lenders for sticking to a painful adjustment programme and amid a receding threat of the island not being ableto meet loan repayments.

The EMTN programme has a €9 billion ceiling. Debt worth about €2.5 billion has been launched under the programme to date, a Finance Ministry official said.

Source: Cyprus Mail