LONDON/NICOSIA – Bank of Cyprus, which has just raised 1 billion euros from investors, plans to sell up to 1 billion euros in bonds in September, chief executive John Hourican said, a move that would mark a rehabilitation of the eurozone’s first bank to recapitalize using depositors’ cash.
The island’s largest bank, which was on the brink of collapse when Cyprus took an international bailout in 2013, said late on Monday that big name investors including US billionaire Wilbur Ross and the European Bank for Reconstruction and Development had agreed to invest 1 billion euro in equity.
“The bank needed a ‘turn the page moment’,” Hourican told Reuters in an interview from Nicosia. “This is the hardest thing we needed to do to put the company back on its footing for recovery.”
The CEO told Reuters that securing the 1 billion euros equity investment would help to speed up the restructuring and revealed that the bank is already ready to return to the debt markets.
It aims to raise between 500 million and 1 billion euros via a covered bond, a kind of debt that has recourse against particular assets of the bank, and also against the bank itself.
“We’d like to be doing that at some point during September, probably late September,” he said.
He said the bank is targeting interest rates on the bonds “in the high threes,” implying a rate between 3.7 percent and 3.99 percent. [Reuters]