By Marisa Wong
Los Angeles, April 25 – Bank of Cyprus Holdings plc said it successfully launched and priced €300 million of green senior preferred notes under its euro medium-term note program.
The bank priced the notes at par with a fixed coupon of 5%, payable annually until the optional redemption date of May 2, 2028. The notes will mature on May 2, 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). If the notes are not redeemed, 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 Euribor plus 197.1 basis points, payable quarterly.
The notes are expected to settle on May 2 and 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 four times over-subscribed at €1.3 billion and final pricing 50 basis points tighter than initial price talk.
The bank said the transaction represents its inaugural green bond issuance. 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.
According to the release, 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% of risk weighted assets and to 12.73% of leverage ratio exposure, finalizing its MREL buildup and creating a comfortable buffer over the final requirements of 25% of risk weighted assets and 5.91% of leverage ratio exposure, which the bank must meet by Dec. 31, 2024.
BofA Securities Europe SA, Deutsche Bank AG, Goldman Sachs Bank Europe SE and J.P. Morgan SE acted as joint lead managers.
The banking and financial services group is based in Nicosia, Cyprus.
| Issuer: | Bank of Cyprus Holdings plc
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| Amount: | €300 million
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| Issue: | Green senior preferred notes
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| Maturity: | May 2, 2029
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| Bookrunners: | BofA Securities Europe SA, Deutsche Bank AG, Goldman Sachs Bank Europe SE and J.P. Morgan SE
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| Co-manager: | Cyprus Investment and Securities Corp. Ltd.
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| Counsel to issuer: | Sidley Austin LLP (England) and Chryssafinis & Polyviou LLC (Cyprus)
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| Coupon: | 5%, payable annually until May 2, 2028; if notes are not redeemed, coupon converts on May 2, 2028 from a fixed rate to a floating rate of Euribor plus 197.1 bps, payable quarterly
|
| Price: | Par
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| Call option: | On May 2, 2028
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| Settlement date: | May 2
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| Listing: | Luxembourg
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