“There was strong demand from UK investors, who account for 35% of the final allotment,” of the €850m 7-year bond issued on Tuesday at an average yield of 2.8%, the PDMO, a division of the Finance Ministry, said in an emailed statement on Wednesday. Investors from Germany, Austria and Switzerland acquired a total of 9.7% of the issue combined, from Italy 15.5%, other European countries 13.5%. Cypriot investors acquired 19.5% of the bond issue.

The breakdown of investors showed that 32.8% of the issue went to fund managers, 35.3% to banks, 25% to hedge funds, 5.1% to pension and insurance funds and 1.8% to central banks, the PDMO said.

Total subscription reached €4.2bn which was the highest since Cyprus’ international-market comeback in 2014, the PDMO said. It added that the bond issue had been announced on Monday at 15:10 pm Central European Time (CET) with a reference guideline of 3% so as to give “investors time to study the transaction ahead of the execution the following day”.

The underwriters, Citi, Goldman Sachs International, and HSBC became recipients of “strong interest” both from holders of securities willing to exchange them with the new bond, and other investors, the PDMO said. Total subscriptions reached €1.9bn by Monday afternoon and when the book was opened the next day at 9:15 CET, the yield guideline fell to 2.9% before subsiding further. The average sale price of the bond, which carries an annual interest rate of 2.75% was 99,686%.

The press understands that the government will use the remaining receipts to repay €280m of the loan received from the International Monetary Fund.

Source: Cyprus Mail