Exclusive: Cyprus DMO Official: Additional Issuance in 2026 “Possible,” Clarity Expected by Summer
- Stelios Leonidou, senior official of Cypriot DMO: New benchmark could be either tap of current 10-year bond or longer-dated issue
- Leonidou: Expect roughly one issuance per year going forward
- Leonidou: There is room to prefund part of 2027 financing needs
- Leonidou: Foreign issuance plans remain on hold until global conditions stabilize
- Leonidou: Initial foreign currency issuance would likely be in USD
- Leonidou: No plans for liability management operations in 2026
By Marta Vilar – MADRID (Econostream) – Cyprus could carry out additional issuance in 2026, with greater clarity on whether this will happen and in what form expected by the summer, according to Stelios Leonidou, a senior official at the Cypriot Public Debt Management Office.
In an interview with Econostream on 28 April 2026 (transcript here), Leonidou said that Cyprus’ current plan does not involve another benchmark bond this year.
“However, given the global situation, we are still assessing potential economic impacts,” he said. “It’s possible that additional financing may be needed.”
He added that the PDMO expected to reassess its funding program over the summer, once updated economic data are available, which should provide greater clarity on any additional issuance.
Asked about the type of transaction Cyprus is considering, Leonidou said the choice would hinge on the deal’s size: larger issues in the €500 million to €1 billion range would likely require launching a new benchmark, while smaller amounts—around €100 million to €250 million—could be raised through domestic issuance, taps, or private placements.
The final decision would be driven mainly by borrowing costs and investor demand, according to Leonidou.
Looking ahead, Cyprus intended to remain a regular presence in debt markets, with at least one issuance per year and potentially one or two transactions totaling around €2–2.5 billion, depending on its financing needs, he said.
Leonidou also indicated that the PDMO may pre-fund part of its 2027 requirements if market conditions allow, with more visibility on this expected by the summer.
He acknowledged that higher interest rates—partly linked to recent geopolitical tensions—had increased the cost of longer-term borrowing, though he said this would not be the sole factor in deciding on maturities.
“If we decide to issue long-term bonds (beyond 10 years), the decision will not be driven solely by current rate levels,” he said. Any new benchmark this year could take the form of a tap of the existing 10-year bond or a bond with a longer tenor, he said.
Leonidou noted that, as an initial step, Cyprus may consider issuing in the 15–20-year maturity range, with the possibility of extending further along the curve in the future.
He said that recent foreign exchange volatility had led Cyprus to scale back its appetite for additional risk, putting plans for foreign currency issuance on hold until markets stabilize.
Should such issuance resume, the US dollar would likely be the preferred option, given the depth and liquidity of the market, as well as its attractiveness to investors in Asia and the Middle East, he said.
