Exclusive: Cyprus DMO Official: Reopening 2034 Bond ‘One of Our Considerations’

24 February 2025

By Marta Vilar – MADRID (Econostream) – The Public Debt Management Office of Cyprus is assessing whether it should reopen the 2034 bond anytime soon, according to Senior Economic Officer Stelios Leonidou.

In an interview with Econostream on February 19 (transcript here), Leonidou said, ‘The 2034 bond, the maturity of which is practically 9 years, seems to be the one that's more actively sought by investors.’

Asked if the PDMO would reopen it anytime soon, Leonidou replied that ‘it is one of the considerations, but these things have not been decided.’

The final decision about this was usually taken much closer to the issuance date, he said.

The PDMO could also deliver more early repayments in 2025, he announced.

‘This is definitely a strategy that we will maintain as long as it is useful for us, but always on a case-by-case basis and if markets are amenable to it’, he said.

Eligible bonds for these early repayments could be off-the-run bonds not very demanded by investors or bonds that needed higher liquidity so that more issuances could be delivered, according to Leonidou.

Regarding this year’s benchmark bond, he said the issuance could be between €750 million and €1 billion and the tenor could be within the range of 5 to 20 years.

‘We haven't issued anything above 10 years for some time’, he said. ‘So, we are interested to see what the situation is over there.’

Asked under what circumstances they would choose the upper or lower part of the size range, Leonidou said that it would depend on funding requirements, among other factors.

‘If they are lower than what was expected, as was the case in the last two years, we might not have room to issue €1 billion’, he said. ‘In that situation we would perhaps look into a few switches or something like that.’

The domestic market was one alternative the PDMO was looking at, he said.

If demand were high enough and conditions of issuance were favourable, the PDMO would consider using that tool.

‘Regarding the tenor, beyond costs we are also looking at demand from investors’, he said. ‘If we see that there is very strong demand for one particular part of the curve, then we will we look at that very carefully.’

The benchmark issuance could be delivered anytime in Q2 or Q3, he said, and did not completely rule out Q4 but stated this last quarter was ‘not always the prime choice’.

Tapping the sustainability bond market again would ‘definitely’ not happen in 2025 and ‘most likely not in 2026 either’, he indicated.

The 30-year bond would only be reopened if ‘demand and prices are at a level with which we are comfortable’, he said.

The PDMO was trying to find ways to increase the domestic investor base and to gain investors from the Middle East or Asia, according to Leonidou.

After a steady pace of rating upgrades in the last few years, he said the PDMO was expecting further improvements in this regard, but he acknowledged that the pace would be slower.