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Moody’s raises Cyprus credit rating outlook

Moody’s ratings agency has raised its credit rating outlook for Cyprus to positive from negative, while confirming the island’s Caa3 credit rating, citing a stronger than expected performance in 2013.

credit-ratingON FRIDAY, Moody’s revised the outlook on Cyprus’ Caa3 government bond rating to positive, citing a stronger-than-expected fiscal and economic performances in 2013 and the Cypriot authorities’ track record of meeting conditions under the Troika funding programme.

However, Cyprus’ credit rating remained unchanged at nine steps below investment grade at Caa3 reflecting Moody’s  view of “the persistent risks that remain to Cyprus’s public finances and their sustainability over the medium term as a result of significant uncertainties to the prospects for the macro economy and banking sector,” the rating company said in its statement.

Commenting on Moody’s announcement, Christos Patsalides, permanent secretary of the Cypriot Ministry of Finance said that it “is an indication that we are on the right track.”

Readers' comments

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  • Spirit of Odd Job Bob says:

    Question: What is the higher figure, negative infinity or negative infinity plus 1?

    So, as a Caa3 rating is 9 grades below investment grade, WHY do Moodys bother do these things?

    Has anyone read this? Could the two possibly be related? EU Threatens Action Against Big Three Ratings Firms Perish the thought!

  • Frank says:

    NASDAQ explains Moody’s ‘Caa3’ as “Obligations rated Caa3 are judged to be of poor standing and are subject to very high credit risk.” We must welcome a ‘positive’ outlook but I wouldn’t rush to put money into Cyprus. Cyprus is still in “poor standing”.

  • Janner says:

    I don’t see how the outlook can be positive. Unless I’ve misunderstood the situation. The NPLs issue is huge! Enough to bankrupt the state. Am I missing something here?

  • Stuart says:

    Having cut Cyprus credit rating in the past at about one notch per month, it’s unlikely that Moody’s will be as eager to raise it again at the same pace. However, the economy must now be moving in the right direction for the outlook to turn from negative to positive. After hitting the buffers, the Cyprus gravy train has seemingly been switched to an alternative track.

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