September 17, 2018 / 9:28 AM / a month ago

Cypriot bond yields fall after S&P lifts sovereign to investment grade

LONDON, Sept 17 (Reuters) - Government bond yields in Cyprus fell to their lowest since late March on Monday, following a decision by S&P Global to lift the country’s credit rating to investment grade territory.

S&P late on Friday lifted Cyprus’s rating to BBB- from BB+, citing brighter growth prospects and consolidation in the banking sector.

That upgrade makes Cyprus eligible for ECB bond purchases. The country has a sub-investment grade rating from Fitch and Moody’s.

The yield on five-year Cypriot government bonds fell as low as 0.826 percent, their lowest level since late March. They were last down 27 bps at 0.95 percent.

Yields on seven-year bonds also fell to their lowest since March.

The country on Monday mandated banks to sell a 10-year government bond in a move analysts said was aimed at taking advantage of the positive sentiment following the upgrade. (Reporting by Dhara Ranasinghe; Editing by Virginia Furness)

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