BoC cancels €1 billion’s worth of government-guaranteed bonds

The Bank of Cyprus announced on Wednesday the cancellation of €1 billion’s worth of government-guaranteed bonds issued in 2012, which it had used as collateral for securing emergency liquidity assistance (ELA).

“After taking into consideration the significant reduction of ELA funding by €9,4 bn since April 2013 to a current level of €2.0bn, the Board of Directors of Bank of Cyprus, at its meeting held on 16 August 2016 decided to proceed with the cancellation of (i) Guaranteed Bonds of €500.000.000 (BOCYG ISIN CY0143940118) issued on 14 November 2012 and (ii) Guaranteed Bonds of €500.000.000 (BOCYG2 ISIN CY0143950117) issued on 27 November 2012,” the bank said in a statement.

“The decision is subject to approvals/consents from the competent authorities.”

In March 2013, it was decided that the lender shoulder some €9.5 billion in ELA taken out by now-defunct Laiki Bank – adding to its own ELA of roughly €2 billion – as part of a massive recapitalisation and restructuring exercise that saw Laiki wound down, with part of it folded into the BoC and the rest awaiting liquidation, as well as a bail-in of uninsured deposits at the two banks.

Since then, the Bank of Cyprus has gradually repaid a large chunk of its ELA obligations, and plans to have repaid it in full by the end of 2017.

“Overall the Bank repaid €1.8bn of ELA funding year to date and is on track to fully repay ELA funding by the end 2017,” the BoC said.

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