Moodys Cuts Cyprus Rating Two Notches
By A. Papapostolou on June 14, 2012
Moodys has cut the credit rating of Cyprus by two notches, citing the nations close links to Greece and the rising likelihood that Athens will exit the euro zone.
Moodys Investors Service on Wednesday downgraded Cypruss government bond ratings to Ba3 from Ba1, and placed the ratings on review for further possible downgrade.
The key driver for todays rating action is the material increase in the likelihood of a Greek exit from the euro area, and the resulting increase in the likely amount of support that the government may have to extend to Cypriot banks. it said on Wednesday.
The two-notch downgrade reflects Moodys assessment that this risk is exacerbated by the fact that the countrys finances are already strained and access to the international markets is still denied.