Spain's BBVA and Bank of Cyprus reopened the market with the issuance of the first euro-denominated contingent convertible bonds (CoCo) since the rescue of Credit Suisse in March, in what is seen as an attempt to restore confidence in the banks' riskiest debt instruments, Reuters reported. The Spanish bank said it aimed to raise between 750 million euros ($810.08 million) and 1 billion euros with this issuance. According to a lead manager memo seen by Reuters, the issuance had already received orders worth over 3 billion euros.
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Cyprus
The economy of Cyprus is expected to grow by 2.6% this year, a full three points lower than the 2022 increase in the island's nation's gross domestic product, the governor of the country's central bank said Tuesday, the Associated Press reported. Governor Constantinos Herodotou said at an economic forum Tuesday that despite the slower growth rate, the forecast compares favorably with the average growth of 1% expected in other countries that use the euro.
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Cyprus's securities regulator plans to extend the suspension of the licence of FTX EU and will meet to discuss the matter next week, Reuters reported. "CySEC is taking all the necessary actions to safeguard the interests of investors of FTX EU and is working closely with the administrator in the U.S. under chapter 11," the person said in a written comment to Reuters. The Cypriot regulator suspended the licence of FTX EU on Nov. 11, just before the cryptocurrency exchange imploded, seeking bankruptcy protection in the United States.
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The Securities and Exchange Commission of Cyprus, or CySEC, reportedly issued a statement amid FTX filing for chapter 11 bankruptcy in the U.S., requesting the exchange halt operations for its Europe arm, CoinTelegraph reported. According to a Nov. 11 Reuters report, the CySEC said it had asked FTX Europe to “suspend its operations and to proceed immediately with a number of actions for the protection of the investors” on Nov. 9.
On June 26, 2019, the Directive (EU) 2019/1023 of the European Parliament and of the Council of June 20, 2019 on preventive restructuring frameworks, on discharge of debt and disqualifications, and of measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt, and amending Directive (EU) 2017/1132 (the “EU Restructuring Directive”), were formally published in the Official Journal of the European Union, the Cyprus Mail reported.
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On 3 December 2020 the Cyprus Parliament voted for the extension of relevant tax provisions of the Cyprus tax legislation with respect to the debt restructurings, Mondaq reported. The debt restructuring provisions allow for certain tax relief incentives for transactions which involve the transfer of Cyprus immovable property by a borrower (the definition of "borrower" has been extended recently to include any related person to the primary borrower) and/or debtor and/or guarantor to a qualified lender.
Following a summer marred by the ongoing coronavirus pandemic the situation being faced by the island’s hoteliers remains dire, and prospects are bleak, the Cyprus Mail reported. According to the Cyprus Hotel Association (Pasyxe) and the Association of Cyprus Tourist Enterprises (ACTE), which counts among its members some of most prominent luxury hotels in the island, the financial situation at the moment does not leave room for optimism.
Banking officials are warning Cypriot authorities to not dilute legislation aimed at helping banks on the east Mediterranean island nation from getting to grips with their huge bad loan problem, the International New York Times reported on an Associated Press story. A source familiar with the situation, who isn't authorized to speak publicly, said Wednesday that proposed amendments "point in the direction" of some watering down to the recently passed legislation that has enabled banks reduce their bad loans.
Cyprus is weighing an early repayment for part of a 2.5 billion-euro ($2.8 billion) Russian loan that dates back to the low point of the financial crisis, two government officials said, after yields on the country’s 10-year debt hit a record low last week, Bloomberg News reported. While the government is seriously considering early repayment, no final decision has been made yet, said one of the officials, who asked not to be named citing the ongoing decision-making process.
Investors demanded a hefty premium from Bank of Cyprus as it raised fresh capital this week, illustrating the continuing toll that heightened market volatility is taking on eurozone financials, the Financial Times reported. The Mediterranean lender is having to pay the highest coupon yet seen on a European contingent convertible bond, demonstrating the lengths that some of the continent’s weaker lenders will have to go to raise capital if market volatility continues.
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