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S&P cuts Cyprus rating to CCC

Rating agency Standard & Poor's on Thursday cut its rating on Cyprus by one notch further into the junk territory, citing a bailout deadlock between government and parliament.

S&P lowered the Mediterranean island nation's long-term sovereign credit rating from CCC+ to CCC with a negative outlook.

Cypriot lawmakers rejected a 5.8 billion euro levy on banks deposits as a condition for a 10 billion euro bailout earlier this week.

"In light of building economic and financial stability pressures, the terms of any support package are likely to be unpopular and challenging to implement in the context of a severe, protracted economic downturn and an extended bank holiday," S&P said in a statement.

"As a consequence, we believe that risks of a sovereign default are rising," it said.

The agency said it might further lower the rating if Cyprus' government fails to obtain a financing program soon. "If it secures a program, we could also lower the ratings later this year if we believe the government is unable to fulfill the program's conditions," S&P said.

[Source: Xinhua, London, 21Mar13]

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small logoThis document has been published on 25Mar13 by the Equipo Nizkor and Derechos Human Rights. In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.