Cyprus is set to return to international markets in 2026 with a 10-year bond issue that could launch as early as today, according to Phileleftheros sources, with major international banks appointed as underwriters.
The Finance Ministry announced that the Republic of Cyprus has mandated Barclays, J.P. Morgan, Morgan Stanley and Société Générale as lead managers for a 10-year euro-denominated benchmark bond (Reg S) maturing in January 2036. Bank of Cyprus will participate as co-manager.
The transaction will be issued under the Republic’s EMTN Programme and is expected to launch in the near future, subject to market conditions.
Cyprus is seeking to capitalise on positive credit ratings—A3 with stable outlook from Moody’s, A- with positive outlook from S&P and Fitch, and A with stable outlook from DBRS—alongside a positive fiscal balance and strong growth prospects.
The borrowing cost will depend on projections for sustainable growth, fiscal discipline and economic policy credibility, combined with the broader geopolitical environment. Greece launched the first eurozone sovereign bond of 2026 on 13 January, raising €4bn for 10 years at 3.46%.
Cyprus did not tap markets in 2025, though it had initially planned to do so. The 2026 issue was considered essential both for financing needs—which will be larger than 2025 but remain manageable—and to maintain contact with the investment community.
According to the Public Debt Management Office, financing needs as a percentage of GDP are projected to reach 2.6% in 2026, 3.2% in 2027 and 4.6% in 2028. Central government debt maturity for 2026 stands at €2.29bn.
The target is for 75% of gross financing needs for 2026-2028 to come from external sources, with the majority through EMTN bond issuances in international markets.
The Public Debt Management Office’s 2026-2028 strategy highlights continuing risks, including the ongoing Russia-Ukraine war and the fluid Middle East situation despite the announced Gaza ceasefire agreement based on the US president’s plan. Potential impacts from new US tariff policy on Cyprus’s economic activity and possible increased public spending due to climate change consequences leave no room for complacency.
Any negative fiscal conditions could slow the pace of public debt reduction relative to GDP, potentially derailing positive momentum for further credit rating upgrades. Any negative development in credit ratings would affect refinancing costs for new borrowing and the average cost of servicing public debt.
An increase in annual gross financing needs due to fiscal pressures—whether from geopolitical developments and new US tariff policy affecting the European Union, or from physical climate risks—could negatively impact borrowing costs. However, the government’s strong cash position significantly limits these risks, the Public Debt Management Office said.
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