First Sustainable Bond in Cyprus Seeks Investors
The Public Debt Management Office has announced that banks have been hired by Cyprus to promote its inaugural sustainable bond issuance.
Phaedonas Kalozois, the Financial Director of the Public Debt Management Office, said Cyprus is currently searching for investors to offer a sustainable bond.
The bond issuance will be subject to market conditions, as stated by Kalozois, and will only be executed if favourable conditions are present. The primary focus at present is to reach out to potential investors, and further details regarding the bond's amount and conditions will be revealed next week.
Issuing green bonds can bring several benefits to Cyprus, including increased access to new investors and heightened interest in the Republic in the international capital markets. Unlike many other countries, Cyprus has opted to issue a sustainable bond that includes funding for both social and green projects.
Cyprus is poised to join several other European governments in launching dedicated programmes aimed at raising billions of euros in debt financing for environmentally beneficial projects.
This move comes as investor interest in such assets continues to grow. In the coming week, Cyprus' funding team will be holding investor meetings. Sustainable bonds are a type of ESG-focused debt that provides a broader approach to financing green and social projects with the proceeds.
While many European governments have chosen to issue standalone green bonds, Cyprus has taken inspiration from smaller countries such as Slovenia and Luxembourg by opting for sustainable bonds. This is because these countries often struggle to find enough projects to support standalone green bonds. According to Reuters, Cyprus aims to raise a minimum of €500 million from its initial issuance, as reported last year.
An investor presentation has revealed that Cyprus plans to use its sustainable bond programme to fund €1.06 billion worth of assets, with 83% of the funding allocated to social projects and the remaining 17% to green projects. Barclays, HSBC, JPMorgan, Morgan Stanley, and Societe Generale have been appointed to manage the deal, according to the lead manager memo.
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Source: Financial Mirror