BOCY cuts ELA to 3.8 bln, as gov’t re­pays 340 mln bond

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Financial Mirror (Cyprus) - - FRONT PAGE -

The Bank of Cyprus an­nounced that it has been no­ti­fied by the Min­istry of Fi­nance that on De­cem­ber 16 the gov­ern­ment will fully re­pay a EUR 340 mln bond held by the bank.

The bond to be re­paid was is­sued on July 1, 2015 to re­place the out­stand­ing amount of the re­cap­i­tal­i­sa­tion bond of Laiki Bank that was ab­sorbed by the Bank of Cyprus in March 2013, fol­low­ing the ac­qui­si­tion of cer­tain as­sets and li­a­bil­i­ties of Laiki Bank.

The bond is pledged as col­lat­eral with the Euro­pean Cen­tral Bank (ECB). The pro­ceeds will be used to re­pay EUR 140 mln of ECB fund­ing and EUR 200 mln of emer­gency liq­uid­ity as­sis­tance (ELA). As the re­cap­i­tal­i­sa­tion bond of Laiki Bank was trans­ferred to the bank at fair value at the ac­qui­si­tion date, there will be an ac­count­ing profit of EUR 13 mln re­sult­ing from this trans­ac­tion.

Ac­cord­ing to the bank, the above re­pay­ment of the bond by the Repub­lic of Cyprus, cou­pled with cus­tomer in­flows ex­pe­ri­enced dur­ing the fourth quar­ter of 2015 and pro­ceeds from ECB fund­ing re­lat­ing to the cov­ered bond be­com­ing ECB el­i­gi­ble, will re­sult in to­tal ELA re­pay­ments of EUR 1.1 bln post Septem­ber 30, re­duc­ing ELA to EUR 3.8 bln.

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