During the week beginning 4 February 2002, € 550 million of 10-year Euro-bonds were issued by the government of Cyprus on the 12 February 2002, following a campaign spearheaded by the Minister of Finance Takis Klerides.

For the purpose, Mr Takis Klerides visited Frankfurt and London last week. Interest by investors in taking up the Cyprus Eurobonds was very strong from a wide geographical range of investors in Europe and gathered great momentum in the last days of the presentations. The bond issue was substantially oversubscribed and the primary issue has been sold on favourable terms, allowing the government to borrow at relatively low interest rates. It is considered that the very good credit rating of A+ assigned by the Fitch credit rating agency in early February helped to stimulate interest in investing in Cyprus.

The bonds were priced at 41 basis points above the Euribor swap rate; the previous 7-year €280 million issued in June 1999 had a spread of 74 points above Euribor. The coupon interest rate on the new bond is 5,5% per annum, the lowest-ever for a EU-candidate country.

The proceeds of the new bond issue will be used to repay the US$300 million bond maturing in June 2002 and to finance projects of local authorities