Government buys back debt maturing in 2019 worth €300m


By Stelios Orphanides

The government bought back in December outstanding government development stock maturing in July 2019 worth €300m held by a “domestic investor,” a finance ministry source said.

The Cyprus Business Mail understands that no other investors showed interest in participating in the buyback beside the domestic investor which was none other than the government-owned Cooperative Central Bank (CCB), the larger domestic owner of government securities. The CCB is currently preparing for a Cyprus Stock Exchange Listing which in turn will allow successive capital increases aiming at attracting private investors and reducing the government’s stake to 25 per cent from currently 99 per cent after it received almost €1.7bn in taxpayer’s money in the form of capital injections.

The CCB declined to comment.

The buyback which is part of the effort of the of the Public Debt Management Office (PDMO) to smooth out future maturities following the €1bn 7-year bond issue in July, has not been officially announced.

Seven weeks ago, the PDMO announced its decision to buy back that security, which carries an annual interest rate of 4.5 per cent at a price of €107.84 plus interest until December 23.

Following the buyback, the overall debt maturing in 2019 fell to well below €1.9bn. In 2020, the government faces maturities amounting at €1.7bn, while total maturities until the end of 2018 are estimated at over €1.8bn.

The government will begin in 2018 with the repayment of the €2.5bn loan from the Russian Federation by paying the first instalment of almost €0.8bn. In September, the total government debt stood at €19.7bn.


About Author

Stelios Orphanides is a journalist at To contact Stelios Orphanides: [email protected]

  • Jeremy Rigg

    I am smelling a slight odour of decay . I cant quite place where it is coming from but it needs a bit more investigation , me thinks.

    • Barry White

      Actually, I believe that the odour you are referring to is emanating from the last shipment of past the expiry date olive oil from Greece.

  • Jack Iacovou

    So gov buys back 300 mil at a price of 107.84 which will cost 323.5 mil. It will also pay interest at 4.5% to dec 16, say a years interest which will cost another 13.5 mil. All in all the deal will cost 337 mil.

    If it didn’t do anything it would have to pay the investor 3 years interest costing 13.5 * 3 = 40.5 plus pay back the principal 300 mil in 3 years. All in all 340.5 mil.

    Its ok as long as the gov can raise/borrow the 337 mil at a real good rate in order to pay the investor. Of course the gov would have to pay interest on the 337 mil it borrows. Its tight numbers but i am sure the treasury would have made the math.