Moody’s upgrades Cyprus

Moody’s Investors Service said it upgraded Cyprus' long-term issuer rating to Ba2 from Ba3.

All senior unsecured bond ratings were also upgraded to Ba2.

Cyprus' short-term ratings were affirmed at Not Prime (NP) and provisional NP.

The outlook was changed to stable from positive.

The agency said the upgrade is driven by the ongoing recovery of Cyprus's banking system, in the context of which the liquidation of Cyprus Cooperative Bank Ltd (Caa2, RUR+) via the sale of its healthy assets and liabilities has materially reduced systemic risks emanating from the banking sector.

The upgrade is also driven by the positive fundamental trend with respect to the government's balance sheet, based on robust nominal growth and a primary surplus, irrespective of the one-off related to the recent Cyprus Cooperative Bank transaction, Moody’s said.

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