IFR – Hedge funds who took a punt on Cyprus when the country ran into trouble last June have averted the threat of capital controls and stand to realise annual returns of at least 25% from buying the country’s four-year €1.4bn international bond that came due on June 3. Early indications are that the instrument is to be repaid in full.
Several funds bought the bond last June after the country first sought aid from its eurozone partners. It was then trading at around 75 cents in the euro. Cyprus eventually secured a €10bn loan from the European Stability Mechanism and the International Monetary Fund in March.