Bank Of Cyprus Takes Decisive Action
The Bank Of Cyprus has embarked on a significant capital management initiative by initiating the early redemption of its Tier 2 Capital Notes. This development represents the final phase of managing the instrument originally issued in 2021, underscoring the bank’s commitment to optimizing its capital structure.
Details Of The Issuance And Tender Offer
In April 2021, the bank issued €300 million in Fixed Rate Reset Tier 2 Capital Notes (ISIN: XS2333239692) with a maturity date initially set for October 2031. The notes included an issuer call option, exercisable between April and October 2026, pending required regulatory approvals. A tender offer launched in September 2025 invited noteholders to sell their holdings back to the bank at 102.3% of the principal, leading to accepted tenders amounting to approximately €217 million in principal. This aggressive move drastically reduced the size of the original issuance.
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Final Steps Towards Redemption
Following additional open market acquisitions totaling €0.3 million in December 2025, the outstanding balance was trimmed to roughly €82 million as of March 2026. The bank now plans to exercise its option, redeeming the remaining amount on April 23, 2026. This step complies with Condition 5(d) of the Tier 2 Notes and follows prior approval from the European Central Bank (ECB) granted on July 25, 2025.
Implications For Financial Strategy
This early redemption reflects a broader strategic goal of reducing leverage and reinforcing financial stability amid evolving market conditions. By actively managing its capital instruments, Bank Of Cyprus positions itself to concentrate on strengthening core operations and meeting stringent regulatory demands, thereby enhancing long-term shareholder value.
