Bank of Cyprus secures €300M bond with record investor demand
The Bank of Cyprus has successfully issued a new €300 million subordinated bond, attracting strong investor interest. The bond, priced at 99.632% with a 4.25% interest rate, will provide additional funding for the bank's operations through a loan arrangement.
The issuance drew significant demand, with over 100 institutional investors taking part. The final offer book surpassed €3 billion, making the bond more than 10 times oversubscribed. The spread was set at 195 basis points—35 points lower than initially expected—while the yield reached 4.32%.
The proceeds will be loaned to the Bank of Cyprus, qualifying as additional Tier 2 capital. This move strengthens the bank's financial position, particularly as it recovers from the 2013 Cyprus bailout. Its market capitalisation has since climbed to around €2.5 billion by early 2026, reflecting improved investor confidence.
Separately, the bank has invited holders of its existing €300 million securities, due in 2031, to opt for early redemption. This can be done from 2026 at 102.3% of their nominal value. The broader economic recovery in the region is also evident, with Greek government bond yields dropping from over 30% in 2012 to below 3.5% today, supported by EU recovery programmes.
The bond's success highlights renewed trust in the Bank of Cyprus and the wider financial stability of the region. The funds will support the bank's lending activities, while the early redemption option provides flexibility for existing investors. The transaction marks another step in the bank's ongoing recovery since the 2013 crisis.
