The three securities include the €750 million bond maturing June 25, 2019, a €1 billion bond maturing on February 3, 2020 and a €100 million bond maturing on May 2, 2020, the PDMO, a unit of the finance Ministry, said.

The interest rate of the respective coupons is 4.75%, 4.625% and 6.5%.

A source familiar with the matter said that with this move, the government aims at improving its public debt structure by smoothening its maturities in 2019 and 2020 which exceed €4 billion in all.

“It is also likely that the government will save in interest payments, but not much,” the source said on condition of anonymity, adding that the saving would result from lower issue yields reflecting the drop in secondary market yields, as well as the recent upgrades of Cyprus’s sovereign ratings by Standard & Poor’s and Fitch Ratings.

Holders of previous issues are not expected to exchange their entire stock with the new bond, which is likely to carry an interest rate of 4.5%, the source said.

The secondary market yields of the 7-year €1 billion bond issued by the government in April dropped to 3.43% today from 4% on the issuance day. Cyprus is rated B3, BB- and B+ by Moody’s Investors Service, Standard & Poor’s and Fitch Ratings respectively. All ratings are below investment grade.

According to the London Stock Exchange’s website, the underwriters of the government’s new euro medium term note are Barclays Bank Plc, Goldman Sachs International, HSBC Bank Plc and Nomura International Plc.

Tomorrow’s debt issue will be Cyprus’s third since its March 2013 bailout and in case it is successful it will signal the successful restoration of market access. The island was shut out of markets in May 2011.

Source: Cyprus Mail