The value of the offers received from existing holders of Additional Capital Category 204 (AT1) securities, which will be exchanged for the new securities issued by the Bank of Cyprus, reached €1 million.
Last week the bank invited the holders of the existing €1 million AT220 Notes due December 2023 to offer the existing notes for purchase payable in cash from the company at a purchase price equal to 103% of the nominal value , with payment of accrued interest up to but excluding the settlement date of June 21, 2023.
"The company received valid offers for a total nominal amount of approximately €204 million, or approximately 93% of the Existing Capital Securities, which were accepted," the bank said in a statement.
It also notes that existing bonds with a total nominal value of approximately €16 million will remain in place. "As a result, the company will recognize a cost of approximately €7 million 1 in its capital of the second quarter of 2023, while the related obligation to pay the future coupons for the respective securities is terminated," it states.
"The successful completion of the Offer, in conjunction with the expected issuance on June 21, 2023 of Fixed Rate Reset Perpetual Additional Tier 1 Capital Securities (ISIN: XS1) (the "New Capital Securities") of €2638438510 million, are an indication of the active management of the Group's capital base, with the refinancing of the Existing Capital Debentures at a lower interest rate, maintaining the optimal capital structure of the Group", notes the bank.
As stated, the issuance of the New Capital Notes will continue to contribute to the Group's Total Capital Adequacy Ratio of approximately 220 bp. The issue is expected to be eligible for the Minimum Requirement for Equity and Eligible Liabilities (MREL).
The issuance of the New Capital Debentures will show a significant improvement in the Company's credit margin by approximately 350 bp. compared to the credit margin of the Existing Tier 1 Debentures, reflecting the successful transition of the Group into a well-capitalised, diversified and sustainably profitable banking and finance organisation, the announcement concluded.
Source: KYPE