Cyprus plans to sell a new 1 billion euro, 7-year bond and buy back a chunk of its older debt in the coming months, the head of its debt office, Phaedon Kalozois, said on Tuesday. Cyprus completed its euro zone/IMF bailout programme earlier this year and is keen to smooth out its debt payments which begin to bunch up in 2019.
It is among the few euro zone states whose borrowing costs go up this year, propelled by neighbouring Greece's need for another bailout and the Brexit worries hanging over its UK-linked businesses and ex-patriots.
"If market conditions are favourable we intend to access the market some time between July and October," Kalozois told Reuters at a Euromoney conference. "The bond will most probably be 1 billion euros ($1.1 billion) and be of 7-year duration."
Nicosia is also eager to buy back some of its existing debt to take advantage of what is still, despite this year's upward creep, a plunge in borrowing costs since the peak of its crisis. It could buy either in tandem with the new bond sale, or separately if it buys back more local bonds, Kalozois said.
"We leave the option open either buy back the bonds under English law... which expire in 2019 and 2020, or to buy back domestic bonds which also expire in 2019 and 2020." "In 2019 there is still a concentration of maturities and we want to smooth this out."
Cyprus no longer qualifies this year for the European Central Bank's bond buying campaign because Nicosia has finished its bailout programme.
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