Bank of Cyprus planning 500mln euros to 1bln euros covered bond- CEO

LONDON, July 29 Tue Jul 29, 2014 5:35am EDT

LONDON, July 29 (Reuters) - Bank of Cyprus hopes to issue a covered bond of between 500 million euros and 1 billion euros in September, its chief executive John Hourican told Reuters on Tuesday.

"We'd like to be doing it (the covered bond) in late September," Hourican said in a telephone interview from Cyprus. "We're ready to go."

He added that the bank, which announced on Monday night that it had raised 1 billion euros of fresh equity, is targeting an interest rate in the "high threes" for the bond issue.

The capital issue and bond plans are the result of a wide-ranging review that Hourican instigated in March. The review also considered putting whether the bank should put its bad assets into a separately funded 'bad bank', but Hourican said that plan was "not feasible at this time".

Investors who bought into the capital raise include famed U.S/ billionaire Wilbur Ross and the European Bank for Reconstruction and Development. Hourican said that the new investors had a "three to five year" horizon on their Bank of Cyprus holding since there is a "lot of work to be done".

Discussions on how they will be represented on the board are ongoing. Hourican said they would want "a seat or two" on the board. "We've very happy to accommodate that," he added. (Reporting By Laura Noonan; Editing by Matt Scuffham)