By Sarka Halas
LONDON, June 10 (IFR) - The Republic of Cyprus is preparing
a benchmark public debt sale just a year after it was bailed
out, which if successful would make it the quickest return to
the bond market by a sovereign after a rescue.
The issuer has mandated Deutsche Bank, Goldman Sachs, HSBC,
UBS and VTB Capital to arrange a series of fixed income investor
meetings in Europe ahead of the deal.
The announcement comes on the back of a peripheral rally
that has been gaining momentum following last week's European
Central Bank announcement that it is seeking to boost Europe's
Greece's 10-year bond, which peaked at 6.3% earlier in June,
was quoted at 5.4% today, according to Tradeweb.
The sovereign will be meeting with investors in London and
Germany over two days starting on June 16.
Cyprus sold a 100m private placement back in April. The
bond was sold to an overseas investor and was seen as an initial
test for a potential public bond market return.
The issue carried a 6.5% coupon, but with peripheral spreads
tightening to record lows, a syndicate banker working on the new
potential Cyprus bond spotted it recently at 5%.
Cyprus has shown stronger than expected economic performance
and full compliance with the European Stability Mechanism and
International Monetary Fund adjustment programme.
The sovereign was effectively shut out of international
financing markets in May 2011 as concerns around the health of
eurozone peripheral countries escalated. This caused its
benchmark bonds to spike in yield to above 14%.
Cyprus is rated Caa3/B/B- by Moody's/S&P/Fitch
Back in April, the sovereign was raised one notch by
Standard and Poor's amid a diminishing threat of the country not
being able to meet loan repayments. Moody's will be next to
review the country's rating on July 18.
(Reporting by Sarka Halas, Editing by Helene Durand, Alex