According to the Public Debt Management Office's announcement, the Republic of Cyprus, rated BBB-/Ba1/BBB-/BBBL (positive/stable/stable/positive) by S&P/Moody's/Fitch/DBRS, came to market on 13 January 2022 with a new fixed-rate benchmark transaction, namely a new €1.0bn 10-year (Jan- 32). The 10-year benchmark was priced with a reoffer spread of m/s+65bp, equivalent to a reoffer yield of 0.994% and a spread of +107.5bp vs. the DBR 0% Feb-32. The joint lead managers of this transaction were BARCLAYS, CITI, DEUTSCHE BANK, GOLDMAN SACHS and HSBC. The listing is in London under English law and is launched off the issuer’s EMTN programme (ISIN XS2434393968).

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Execution Highlights

• The Republic of Cyprus officially announced its intention to come to market with a new 10-year benchmark transaction at 12:00 LDN the afternoon of Wednesday, 12th January 2022, and that pricing was expected in the near future, subject to market conditions.
• At 8:22 LDN the morning of Thursday, 13th January, books officially opened and initial guidance was announced for the new 10-year benchmark at m/s+75bp area. The transaction attracted sizeable investor interest from the onset and at 10:09 LDN, with orders in excess of €7.5bn, revised guidance was announced at m/s+70bps area.
• Later in the morning at 11:39 LDN, with the orderbook now in excess of €7.8bn, the quality of the orders allowed the final reoffer spread to be tightened further and set at m/s+65bps, and at the same time for the size of the issue to be set at €1bn. Shortly thereafter, the orderbook closed at 12:15 LDN.
• At 14:48 LDN, the new €1bn 10-year bond officially priced at m/s+65bp, equivalent to a reoffer yield of 0.994% and a spread of +107.5bp over the DBR 0% Feb-32. Before the announcement of the transaction, the joint lead managers identified the fair value of a new 10-year benchmark as m/s + ‘low 60s’ area.

Summary of Distribution

• Cyprus’ new 10-year benchmark attracted orders from notably high quality investors. With regard to the geographical distribution, more than 87% of orders came from international investors. Of these participants, the majority originated between the United Kingdom and Nordic countries.
• In terms of investor type, the majority of participants were fund managers, followed by insurance / pension funds and banks / private banks.