Cyprus hit a historic milestone in its borrowing costs on Wednesday, securing a €1 billion 10-year bond with a spread of just 44 basis points over mid-swap rates—the lowest in the country’s history.
The investment community lent Cyprus the funds at 3.25% interest, nearly a full percentage point below the 4.125% rate it paid for an identical €1 billion 10-year bond in April 2023.
The 0.87 percentage point improvement reflects growing investor confidence in Cyprus, backed by strong fiscal performance, financial stability and positive credit rating assessments, according to Finance Minister Makis Keravnos.
Keravnos said the government remains determined to continue this sound policy, which secures the economy’s future development trajectory and enables the transfer of these positive results to society. The European Medium Term Note bond will cover Cyprus’s 2026 financing needs.
The 44 basis point spread represents a dramatic tightening from the 125 basis point spread Cyprus paid in January 2010, when it issued a €1 billion 10-year bond at 4.683% amid difficult market conditions.
More recent issuances show steady improvement: Cyprus paid 4.250% for a €1 billion 10-year bond in October 2015, and 2.375% for a €1.5 billion 10-year bond in 2018. Last year, Cyprus issued a €1 billion seven-year bond at 3.25%. The country did not access markets in 2025.
The improved borrowing terms coincide with Cyprus recording one of the European Union’s sharpest public debt reductions. Eurostat data shows Cyprus’s public debt fell 6.1 percentage points in the third quarter of 2025 compared to the same period in 2024, reaching 60.6% of GDP.
Only Greece (down 8.9 percentage points) and Ireland (down 7.1 percentage points) posted larger reductions. Denmark fell 3.1 percentage points and Latvia 2.3 percentage points. The eurozone average stands at 88.5% of GDP.
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