Cypriot bond yields tumble after stellar bond sale
Government bond yields in Cyprus tumbled on Wednesday and stood out as the star performer in eurozone debt markets, a day after a 15-year bond sale drew solid demand in a further sign of progress for a country that exited its bailout in 2016.
Cyprus on Tuesday sold its longest ever issue via a syndicate of banks. The new 1 billion euro issue saw more than 8 billion euros worth of demand from investors, according to International Financing Review.
The Mediterranean island has made steady progress to returning to raise funding on capital markets in recent years.
Last year S&P Global lifted the country’s credit rating to investment grade, paving the way for the European Central Bank to start buying Cypriot bonds under its stimulus scheme.
Tuesday’s auction, the latest in a string of successful syndicated bond deals in the euro area, provided another impetus for Cypriot bond yields to push lower.
The yield on five-year Cypriot bonds fell 20 basis points to 0.68 percent. Ten-year yields fell 6 bps to 1.91 percent, while yields on seven-year bonds were down 4 bps on the day.
“Cyprus is no longer considered a weak spot,” said Commerzbank rates strategist Rainer Guntermann.
“It is a small market but the syndicated issue this week does offer an interesting pick up and given the new stability is viewed as attractive.”
[Reuters]
