Moody's cuts Cyprus

Moody's Investors Service said it downgraded Cyprus' government bond ratings to Baa3 from Baa1 and placed the ratings on review for further possible downgrade.

The rating agency has also downgraded Cyprus's short-term rating to Prime-3 from Prime-2 and placed it on review for further possible downgrade.

Moody's said the main factor in the downgrade is the high likelihood that the Cypriot banking system will require state support in 2012 as a result of the large expected write-downs on its exposures to Greek government bonds.

This state support will have a significantly negative impact on the government's debt metrics. The full extent of required state support for the Cypriot banking system could increase further, given the substantial downside economic and financial risks in Greece.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.