Announcement
Issue of Green Senior Preferred
Notes by Bank of Cyprus Public Company Limited
Nicosia, 25 April 2024
Bank of Cyprus Holdings Public
Limited Company (together with its subsidiary, Bank of Cyprus
Public Company Limited (the 'Bank'), and the Bank's subsidiaries,
the 'Group') announces today that the Bank has successfully
launched and priced an issuance of €300 mn green senior preferred
notes (the 'Notes') under its EMTN Programme.
The Notes were priced at par with a
fixed coupon of 5% per annum, payable annually in arrear, until the
Optional Redemption Date i.e. 2 May 2028. The maturity date of the
Notes is 2 May 2029; however, the Bank may, at its discretion,
redeem the Notes on the Optional Redemption Date subject to meeting
certain conditions (including applicable regulatory consents) as
specified in the Terms and Conditions. If the Notes are not
redeemed by the Bank, the coupon payable from the Optional
Redemption Date until the Maturity Date will convert from a fixed
rate to a floating rate and will be equal to 3-month Euribor +
197.1 bps, payable quarterly in arrear.
It is expected that settlement of
the Notes will occur on 2 May 2024 and the Notes will be listed on
the Luxembourg Stock Exchange's Euro MTF market.
The issuance was met with strong
demand, attracting interest from more than 120 institutional
investors, with a final orderbook over 4 times over-subscribed at
€1.3 bn and final pricing 50 basis points tighter than the initial
pricing indication. The transaction represents the Bank's inaugural
green bond issuance in line with the Group's Beyond Banking
approach, aimed at creating a stronger, safer and
future-focused Βank
and leading the transition of Cyprus to a sustainable future. An
amount equivalent to the net proceeds of the Notes will be
allocated to Eligible Green Projects as described in the Bank's
Sustainable Finance Framework, which include Green Buildings,
Energy Efficiency, Clean Transport and Renewable Energy.
The success of the transaction, in
terms of investor participation and final pricing, represents yet
another milestone in terms of market recognition of the Group's
improved financial profile.
The Notes are expected to comply
with the criteria for the Minimum Requirement for Own Funds and
Eligible Liabilities ('MREL') and to contribute towards the Bank's
MREL requirements. This transaction improves the Bank's MREL ratio
to 28.36%1,2 of risk weighted assets ('RWA') and to
12.73%1 of Leverage Ratio Exposure ('LRE'), finalising
its MREL build-up and creating a comfortable buffer over the final
requirements of 25%2 of RWA and 5.91% of LRE which the
Bank must meet by 31 December 2024.
BofA Securities Europe SA, Deutsche
Bank AG, Goldman Sachs Bank Europe SE and J.P. Morgan SE acted as
Joint Lead Managers. The Cyprus Investment and Securities
Corporation Limited (CISCO) acted as Co-Manager.
Sidley Austin LLP acted as English
legal advisers and Chryssafinis & Polyviou LLC acted as Cypriot
legal advisers to the Bank in this transaction.
For further information, please
contact Investor Relations at investors@bankofcyprus.com.
1 Based on financial results as at 31 December 2023, taking into
account the aforementioned issuance of the Notes.
2 The Combined Buffer Requirement applies on top of MREL as
%RWAs
Group Profile
The Bank of Cyprus Group is the leading banking and financial
services group in Cyprus, providing a wide range of financial
products and services which include retail and commercial banking,
finance, factoring, investment banking, brokerage, fund management,
private banking, life and general insurance. At 31 December 2023,
the Bank of Cyprus Group operated through a total of 64 branches in
Cyprus, of which 4 operated as cash offices. The Bank of Cyprus
Group employed 2,830 staff worldwide. At 31 December 2023, the
Group's Total Assets amounted to €26.6 bn and Total Equity was €2.5
bn. The Bank of Cyprus Group comprises Bank of Cyprus Holdings
Public Limited Company, its subsidiary Bank of Cyprus Public
Company Limited and its subsidiaries.