BoC bond issue draws more than €1.7bn in investor orders

The Bank of Cyprus (BoC) on Thursday announced that it successfully launched and priced a €300 million senior preferred notes issuance under its EMTN Programme.

According to a filing on the Cyprus Stock Exchange (CSE), the transaction was carried out by Bank of Cyprus Holdings Public Limited Company together with its subsidiary Bank of Cyprus Public Company Limited and the wider group.

The notes were priced at 99.822 per cent with a fixed coupon of 3.875 per cent per annum, payable annually in arrear until the optional redemption date of May 20, 2030.

The issuance achieved a yield of 3.924 per cent, reflecting favourable market conditions and investor appetite.

The maturity date is set for May 20, 2031, although the bank retains the option to redeem the notes earlier on the optional redemption date, subject to regulatory approvals and conditions outlined in the terms.

If the notes are not redeemed at that stage, the coupon will convert to a floating rate, calculated as three-month Euribor plus 100 basis points, and will be payable quarterly in arrear until maturity.

Settlement of the notes is expected to take place on May 20, 2026, with the securities to be admitted for trading on the Luxembourg Stock Exchange Euro MTF market.

The issuance attracted strong investor demand, drawing interest from more than 120 institutional investors.

The final orderbook reached approximately six times oversubscription at more than €1.7 billion, peaking at €1.9 billion, with final pricing tightened by 30 to 35 basis points compared with initial guidance.

The bank stated that the outcome highlights market recognition of the Group’s strong financial profile, as reflected in both participation levels and pricing.

The notes are expected to qualify towards the minimum requirement for own funds and eligible liabilities, contributing to the bank’s regulatory obligations.

The transaction is projected to improve the bank’s MREL ratio by around 284 basis points relative to risk-weighted assets.

This will maintain a comfortable buffer above current requirements, which stand at 24.03 per cent of risk-weighted assets and 5.91 per cent of leverage ratio exposure, levels the bank must meet at all times.

BNP Paribas, BofA Securities Europe SA, Deutsche Bank AG and Goldman Sachs Bank Europe SE acted as joint lead managers for the transaction.

Bank of Cyprus Public Company Limited also participated as co-manager, the announcement added.

Sidley Austin LLP served as English legal advisers, while Chryssafinis and Polyviou LLC acted as Cypriot legal advisers to the bank.