Post-crisis bond first for Cyprus

THE CYPRIOT government yesterday issued its first public bond since a financial crisis last year, following sharp improvements in the climate for sovereign debt from the Eurozone’s troubled periphery.

The country’s finance ministry raised €750m (£600.9m) in a bond issue yesterday, having initially aimed to raise €500m. The five-year bonds will carry a 4.85 per cent yield. The interest on the debt will still be some of the highest of any euro-area country, but yields have dropped dramatically for many countries hit by sovereign crises.

Early last month, the finance ministry arranged the placement of €100m in six-year bonds privately, yielding 6.5 per cent.

Construction data for the Eurozone more broadly showed the joint-strongest annual increase since well before the financial crisis yesterday, with output rising eight per cent in the year to April.

Despite the positive news from the Eurozone, the Centre for Economic Policy Research announced this week that the current expansion was so feeble that it barely constituted a recovery from a recession that officially ended last year. The group warned it could simply be a “prolonged pause” between slumps.