Fitch cuts Cypriot banks

Fitch Ratings said it downgraded Bank of Cyprus', Cyprus Popular Bank's and Hellenic Bank's long-term issuer default ratings and support rating floors to BB- from BB following the downgrade of Cyprus' sovereign rating.

The outlooks on the banks' long-term issuer default ratings are negative, in line with that of the sovereign. All three banks' short-term issuer default ratings and support ratings have been affirmed at B and 3, respectively.

At the same time, Bank of Cyprus and Cyprus Popular Bank's viability ratings have been downgraded to C from CCC and CC, respectively, reflecting the agency's belief that failure of the two banks is imminent. Fitch said it expects that the banks will require sizeable capital injections and that these will be provided by Cypriot and/or international authorities.

Hellenic Bank's viability rating has also been downgraded to CC from CCC to reflect that failure of the bank appears probable, the agency said.

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