Nicosia, Friday 20 June 2014 – Cyprus formally returned to the markets this week after three and a half years with a 5-year €750 ml euro bond with a yield of 4.75%.

The bond, which was initially set at €500 ml, was oversubscribed by four times with offers reaching €2 billion.

Cyprus Finance Minister, Charis Georgiades declared: “It’s done. Cyprus is back to the markets. €750 ml, a yield of 4.75% and a 5-year benchmark due June 2019.”

He added that the sale was a step towards Cyprus’ “systematic” return to markets after a three-year hiatus and pledged the country would not let up on its fiscal reforms.

The sale attracted investors mainly from Britain, other European countries and Cyprus, with investment funds absorbing 51 percent of the issue, hedge funds 27 percent and banks 22 percent.

Reuters reported that Cyprus returned to the markets a little more than a year after it was bailed out, the fastest of any country rescued by euro zone peers during the bloc’s debt crisis.

The news agency said the five-year bond offered the highest yield of any comparable euro zone debt.

Fitch Ratings described Cyprus` return to the international capital markets as positive, noting however that this does not mean that market access will be permanent as risks to the Cypriot economy`s outlook remain.

“Cyprus`s return to the international bond market is positive for the sovereign, helping it meet funding needs and improving its financing flexibility,” Fitch said in a press release, adding however that “it is not certain that market access will be permanent, and the high level of sovereign risk in Cyprus is reflected in its `B-` rating.”

In a separate development, the Eurogroup has endorsed in principle the disbursement of the next tranche of financial assistance to Cyprus.

In a statement on Thursday, 19 June, the Eurogroup welcomed the Troika`s conclusion, following its fourth review mission, that Cyprus`s adjustment programme remains on track.

“We are pleased with the continuation of the good fiscal performance recorded so far under the programme,” the Eurogroup said.

Subject to national procedures and formal approval by the European Stability Mechanism (ESM) governing bodies, the ESM is scheduled to disburse €600 ml in the first half of July. The IMF Executive Board is expected to consider the disbursement of €86 ml around the same time.