Bank of Cyprus Ltd has successfully launched a euros 200 million Bond issue denominated in Euros. The Bonds are step-up subordinated floating rate notes and mature in October 2013 but the Bank has the option to call them during or after October 2008. The Bonds bear a coupon of 100bps above the three-month Euribor and were issued at a re-offer price of 99.766. If the Bonds are not called in October 2008 the coupon steps up by an additional 120bps. The Bonds will be listed on the Luxembourg Stock Exchange.

The proceeds of the issue will strengthen the Bank?s capital base. JP Morgan and Merrill Lynch International acted as Joint Lead Managers and Book-runners of the issue and the syndicate group comprised Alpha Bank and National Bank of Greece. The Bonds were issued out of the Bank?s recently set-up EMTN program.

The issue was well diversified with orders from institutional investors across Europe. Greece, the United Kingdom and Italy represented the major participants but a discrete amount of orders was also derived from a number of other countries such as Spain and Germany.

The issue was a significant success for the Bank of Cyprus Group as the terms of the Bonds are more favourable compared to the Bank?s previous issue of similar bonds in June 2001, which demonstrates the confidence of the international investor community in the Bank of Cyprus name.