International investors accounted for 80% of orders for Cyprus’s €1 billion 10-year benchmark bond issued on Wednesday, according to the Public Debt Management Office at the Ministry of Finance.
The bond attracted orders from a broad range of high-quality investors as Cyprus’s first syndication since regaining an ‘A’ rating from all major credit rating agencies, the office said.
British investors submitted the largest share at 43.5%, followed by Scandinavian countries at 14.0%, Portugal at 9.7%, Germany and Austria at 4.6%, France at 2.5%, the Netherlands at 1.6%, and Italy at 1.6%.
Asset managers made up 53.8% of investor orders, with banks accounting for 25.8%, insurance and pension firms 8.1%, and central banks and official institutions 7.8%.
The 10-year benchmark bond priced at mid-swaps plus 44 basis points, equivalent to a yield to maturity of 3.339% and a spread of 51.0 basis points over the DBR 2.6% August 2035 reference.
Barclays, J.P. Morgan, Morgan Stanley and Société Générale served as lead managers, whilst Bank of Cyprus acted as co-manager. The new bond will list on the London Stock Exchange under English law using Cyprus’s EMTN programme (ISIN XS3281842578).
Cyprus announced its intention to return to the market with a new 10-year benchmark bond maturing in January 2036 on Tuesday 20 January at 10:30 London time, with the transaction to launch subject to market conditions, according to the debt management office.
The issuance marks Cyprus’s first new syndication since June 2024 and its first new 10-year benchmark bond since April 2023.
The Republic opened the order book for the €1 billion transaction at 08:27 London time on Wednesday with initial guidance in the mid-swaps plus 52 basis points area.
The transaction drew strong investor interest from the start, with the order book exceeding €14.5 billion (excluding lead manager interests) by 10:00 London time, prompting a revision of guidance to the mid-swaps plus 47 basis points area.
Momentum in the high-quality order book continued throughout the morning, allowing Cyprus to tighten the spread by a further three basis points to mid-swaps plus 44 basis points.
The final order book closed with total demand exceeding €16.4 billion (excluding lead manager interests), representing the largest order book achieved in a syndicated transaction by Cyprus and surpassing the previous record set in 2023 with the Sustainable Bond.
The new 10-year €1 billion bond priced at 13:50 London time at mid-swaps plus 44 basis points, equivalent to a yield to maturity of 3.339% and a spread of 51.0 basis points over the DBR 2.6% August 2035 reference.
Lead managers assessed the fair value of the new 10-year Cypriot benchmark bond in the low mid-swaps plus 40 basis points area before the announcement.
The transaction priced with minimal new issue premium, which combined with the record order book reflects continued strong support from the international investment community for Cyprus, supported by its solid economic fundamentals and positive ratings trajectory, according to the debt management office.
(information from CNA)
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