The bond issue will meet the minimum equity and eligible liabilities (MREL) requirement
Bank of Cyprus is entering the markets for the issuance of a new senior bond of €300 million, in an attempt to take advantage of the positive momentum in the wake of the issuance of the Additional Capital 1 bond in mid-June.
The issuance of the bond will meet the criteria for the minimum requirement of own funds and eligible liabilities (MREL).
As the KYPE is informed, the bid book opened with the interest rate amounting to 7.75% (Euribor and a margin of approximately 4.40%).
Closer to the target
The target set for the bank by the Single Resolution Board (SRB) is 24.35% of weighted assets, which corresponds to €2.47 billion. According to the bank's latest results, the formation of MREL amounts to 20.82%, i.e. €2.12 billion, with the target deficit amounting to around €350 million and should be reached by the end of December 2025. However, with the increase of the countercyclical reserve by the Central Bank to 1% from June 2024, there is an additional obligation of €100 million.
According to with the new issue, the bank is very close to achieving the target and will need another issue possibly next year to be fully compliant.
Bank of America, Barclays, Citi and Goldman Sachs Bank Europe SE and CISCO ai have jointly acted as advisors to the issue, who arranged a series of presentations to investors.