Cypriot government aims to boost bond investors
Local currency bonds will be bought back by the Cypriot government in preparation for the change to electronic auction and trading on the MTS platform in 2008.
The Central Bank will buy back up to CYP 5 billion (£5.97 billion) in Cyprus Republic debt issued locally, not including those issued to the Social Insurance Fund.
Speaking to the Financial Mirror, a senior Central Bank official explained the buyback scheme will involve a "fair valuation" of all outstanding bonds prices to maturity.
"We chose to do the auction through the MTS platform, which is where the primary dealers are already based in order to make it cheaper, easier and less costly for them to transact with us," the official said.
New bonds will be issued with the average duration of the old bonds or will be settled in cash, the website reported.
All new bond issues will be in euros and there are other new features to the bonds, including one interest payment rather than two.
Cyprus joined the EU in 2004.
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