Fitch upgrades Cyprus to B+

Fitch Ratings said it upgraded Cyprus' long-term foreign and local currency issuer default ratings to B+ from B-.

The outlooks are positive.

The issue ratings on Cyprus' senior unsecured foreign and local currency bonds were also upgraded to B+ from B-. The country ceiling was raised to BB+ from BB- and the short-term foreign currency issuer default rating was affirmed at B.

Fitch said Cyprus has established a track record of fiscal consolidation and over-performance on its fiscal targets. In 2014, the country achieved an almost balanced general government position (excluding a one-off €1.5 billion capital injection to the cooperative banking sector) compared with a deficit of 8.5% of GDP originally projected by the agency in June 2013, when the agency downgraded Cyprus' long-term foreign currency issuer default rating to B-.

The positive momentum has carried over to 2015 and the budget has remained in slight surplus as of end-July 2015, with Fitch now projecting a deficit of 1% of GDP for 2015 and surpluses of 0.2% and 1% for 2016 and 2017, respectively.

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