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Bank Of Cyprus Secures €217 Million In Tendered Capital Notes, Reinforcing Its Strategic Refinancing

by THEFUTURE.TEAM

September 19, 2025

Announcement Recap

The Bank of Cyprus has confirmed the receipt of valid tenders totaling approximately €217 million for its €300 million Fixed Rate Reset Tier 2 Capital Notes due October 2031. This decisive cash offer was extended to existing note holders at a premium of 102.3% of the principal, with accrued interest payable up to, but excluding, the settlement date of September 18, 2025.

Transaction Highlights

Representing roughly 72% of the outstanding securities, all valid tenders were accepted, leaving approximately €83 million in notes still outstanding. The restructuring is expected to incur a cost of about €5 million in the third quarter of 2025, reflecting the omission of future coupon obligations. Concurrently, the bank anticipates a gain of approximately €1.5 million from the unwinding of the associated hedging instruments.

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Strategic Capital Optimization

This successful tender underscores the group’s proactive capital management strategy. Looking ahead, the Bank of Cyprus plans to issue new Fixed Rate Reset Tier 2 Capital Notes on September 18, 2025. The new issue, set at a significantly lower coupon rate, will not only refinance the remaining outstanding notes but is also projected to add around 300 basis points to the Total Capital Ratio. Such strategic moves reiterate the bank’s commitment to maintaining an optimized capital structure.

Market Impact and Execution

Industry heavyweights BofA Securities Europe SA and Goldman Sachs Bank Europe SE served as dealer managers for this offer, further affirming the transaction’s market expertise and execution strength. The initiative highlights a broader trend in the financial sector, where institutions are leveraging refinancing and capital restructuring to enhance financial resilience in a competitive market environment.

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EBA Finds Gaps In Bank Recovery Dry Run Practices

by THEFUTURE.TEAM

April 15, 2026

Overview Of The European Banking Authority Findings

The European Banking Authority (EBA) published a report examining how banks conduct dry runs to test recovery plans. The analysis focuses on how institutions prepare for stress scenarios and assess their ability to implement recovery measures. Dry runs serve as practical tests of operational readiness under adverse conditions.

Varied Approaches And Institutional Maturity

Findings show clear differences in how banks design and execute these exercises. Approaches vary in scope, methodology, and depth of implementation. Institutions that treat dry runs mainly as compliance exercises tend to gain limited practical value. In such cases, testing does not translate into improvements in recovery planning.

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Integrating Dry Runs Into Broader Risk Management

More advanced institutions integrate dry runs into broader risk management processes. These exercises are used to test internal coordination, decision-making, and operational response. Such integration improves the feasibility of recovery plans and supports faster execution during stress events.

Regulatory Evolution And Future Implications

The EBA highlights the need for consistent and high-quality testing of recovery frameworks. Updates to testing approaches are required as risk conditions evolve. Closer alignment between recovery and resolution planning is also identified as an area for further development.

Moving Forward With Strategic Preparedness

According to EBA, the benchmarking exercise is intended to guide improvements rather than impose requirements. The report provides reference points for strengthening testing practices across institutions. Additional guidance, including the EBA handbook on simulation exercises, supports further development of recovery and resolution planning.