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.
