Sunday February 1, 2015 Search
Weather | Athens
16o C
13o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Bailed-out Cyprus returns to bond market to feed yield-hungry investors

By John Geddie

Cyprus is on the verge of making the fastest comeback to markets of any bailed-out euro zone country when it sells a new five-year bond later on Wednesday.

The Mediterranean island is offering higher returns than any other sovereign issuer in the single-currency bloc, hoping that yield-starved investors will be coaxed back to a country that was hitting bank depositors and imposing capital controls just over a year ago.

"It's not a domestic issue, it's a European issue. People are searching for yield, said of Martin Wilhelm, founder of IfK, a German Kiel-based bond boutique, which runs a bond fund with Acatis.

Cyprus is taking orders for its new bonds, which mature in June 2019, with an indicative yield of around 4.90 percent. It has already received over 1.5 billion euros of interest and will price the bonds later on Wednesday, reports IFR.

Wilhelm said he has placed orders in the sale and believes it will price at an yield between 4.75 and 4.90 percent.

The sale comes just two months after Greece sold a new five-year bond at a yield of 4.95 percent which was one of the fastest return to markets of a defaulted country. Those bonds have since rallied to 4.25 percent, according to Tradeweb data.

Returns on all euro zone sovereign bonds have been squeezed, to record lows in many cases, as the European Central Bank has pumped the market with liquidity and cut interest rates so far they have turned negative.

As a direct result of the ECB charging banks to keep their money in overnight deposits, Germany and the Netherlands sold treasury bills at a negative yield on Monday.

This dynamic will further fuel investor appetite to take higher risks to maximize profits, exacerbating fears that some bonds have become over valued.

"The risk that valuations and primary market dynamics aren't related to fundamentals anymore, said Michael Leister, senior strategist at Commerzbank.

Cyprus' credit ratings remain deep in junk territory following a debt exchange in March last year that ratings agencies classed as a default.

There have been glimmers of a recovery since it signed a 10 billion euro aid, however.

Its economy is expected to contract by 4.2 percent this year, less than the 4.8 percent initially expected, and some, such as local consultancy Sapienta, see the decline in output at closer to 3 percent.

Like Greece's deal in April, the buyers are expected to largely British- and U.S.-based hedge funds. Following the success of its deal, Greece is seeking to raise around 2-3 billion euros via the sale of a new seven-year bond in the next months. [Reuters]

ekathimerini.com , Wednesday June 18, 2014 (12:47)  
ECBs Constancio signals Greek waiver may end if program dropped
Greece starts countdown to cash crunch saying bailout over
How Greece can run out of cash and what ECBs Draghi can do
Varoufakis to meet French counterpart on Sunday
Europe waits for proposals from Athens
European officials believe that there is scope for an agreement with the new Greek government but that Athens will have to accept a compromise on its demands. Officials in Brussels told Kath...
Notes provide more clues on prison breakout scheme
Police have found handwritten notes exchanged between 22-year-old Angeliki Spyropoulou and jailed members of the Conspiracy of the Cells of Fire at a safe house in Loutraki, west of Athens, ...
Inside News
BASKETBALL
Panathinaikos preserves perfect home record
After yet another great performance at home, Panathinaikos defeated Galatasaray 86-77 in Athens on Friday to get to three wins in five games at the Euroleague top-16. The Greek champion shoo...
SOCCER
Gattuso: Unpaid OFI players couldnt buy food
Former coach Gennaro Gattuso has lifted the lid on the plight of crisis-club OFI Crete which has been banned from playing in the Super League until it clears mounting debts with its staff. T...
Inside Sports
COMMENTARY
Unyielding truth
Finance Minister Yanis Varoufakiss recent statement that growth does not mean having Porsche Cayennes in the narrow streets of Greece has made something of an impression and is now being ...
EDITORIAL
This is not a game
Greeces negotiations with its partners and creditors must be conducted in such a way as to safeguard the countrys real economy, a vital sector which prior to the elections had appeared to ...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
RECENT NEWS
1. Europe waits for proposals from Athens
2. Notes provide more clues on prison breakout scheme
3. Drug prices are falling but volume sold remains high
4. Tsipras plays down chance of rift
5. Ex-revenues chief Theoharis claimes political interference
6. Journalist to head Greeces National Intelligence Service
more news
Today
This Week
1. US to work closely with Greece and EU to resolve differences, says White House
2. Merkel rejects debt writedown for Greece
3. Greek bank debt plummets as investors head for the exit
4. Greek markets plunge as SYRIZA digs in on challenge to austerity
5. Tsipras says Greece to repay ECB, IMF, reach deal with euro area
6. Greece seeks EU allies but Germany holds firm
Today
This Week
1. Greek Elections 2015 | LIVE
2. SYRIZA heads for historic victory but without majority
3. SYRIZA's win will test institutions
4. Greek Elections 2015: The day after | LIVE
5. EU must accept that Greek debt relief is inevitable
6. Athens may veto further EU sanctions against Russia
Find us ...
... on
Twitter
... on Facebook
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright 2015, H KAΘHMEPINH All Rights Reserved.