The Ministry of Finance is reportedly considering measures to provide financial relief to bondholders affected by the 2013 banking crisis, specifically those who had taken out loans secured against their securities prior to the March 2013 bail-in.

Available data indicates that hundreds of bondholders had loans backed by their securities. Following the deposit and bond haircuts imposed on Laiki Bank and the Bank of Cyprus, the vast majority of these loans turned non-performing.

Borrowers who were creditworthy before the financial crisis gradually became insolvent, having lost the ability to service their debts. This shift was primarily due to the total loss in value of their securities, triggered by the Eurogroup’s March 2013 decisions, the closure of Laiki Bank, deposit haircuts, capital controls, and depletion of provident fund reserves held in the two banks.

It is worth noting that the total volume of these collateralized loans amounted to €180 million from Laiki Bank and €20 million from the Bank of Cyprus.

According to information obtained by Brief, several affected bondholders have contacted the relevant department at the Ministry of Finance that manages cases under the National Solidarity Fund (NSF), inquiring about possible measures the government could take to address this sensitive issue.

While the Ministry has not issued any formal commitments, it has reportedly expressed a positive stance, encouraging affected individuals to submit formal applications for review.

Applicants are requesting that their net loss — the difference between the original value of their securities and the amount acknowledged during a loan restructuring by a bank or a credit acquisition company — be taken into account for potential compensation through the NSF.

For example, if a bondholder held €10,000 worth of securities prior to March 2013 which were later nullified, and the bank compensated only 20% (€2,000) in a settlement, the remaining €8,000 loss could be submitted as a claim to the Ministry of Finance under the National Solidarity Fund framework.

The House of Representatives recently approved a €100 million budget for the National Solidarity Fund for the year 2025. Additionally, the Council of Ministers has approved the fund’s replenishment plan, confirming that only natural persons whose deposits and securities were subject to the 2013 bail-in are eligible to benefit.