Cyprus to tap international markets

CYPRUS plans to tap international markets under its Euro Medium Term Note (EMTN) programme by November, the finance ministry said yesterday.

The Republic also planned to continue issuing bonds on the domestic market in a bid to maintain a balance between local and foreign investors, it said.

“Cyprus has retained a solid position in the financial and sovereign debt crisis. The Cypriot economy has the fundamentals to remain resilient to developments in the external environment,” the ministry said.

It was responding to a Reuters report on Friday that highlighted rising yields in its secondary market debt in the past month. Commerzbank said in a research note on June 1 that Cyprus was at risk of joining bailout countries Greece, Ireland and Portugal because of its heavy exposure to debt-ridden Greece.

Yields on a euro-denominated Cypriot 10-year government bond issued to international investors in February 2010 have risen sharply in recent weeks.

A similar situation manifested between 2002 and 2005 on locally issued bonds where yields reached 6.5 per cent, without fiscal sustainability or repayment problems, authorities said.

“We have no doubt that Cyprus will cope well with all contemporary challenges and especially those relating to its sovereign debt management,” the ministry said yesterday.

Cyprus’ public debt, which represents 60.8 per cent of GDP, was allocated 60 per cent to domestic investors and 40 per cent to foreign investors by the end of 2010. Some 75 per cent of the debt maturing between July and December of this year is held by domestic investors and it was authorities’ intention to issue a sufficient amount in the domestic market to maintain the balance between local and foreign investors, it said.

 

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