Moody's downgrades three Cypriot banks

Moody's Investors Service said it downgraded the senior unsecured debt and deposit ratings of three Cypriot banks to Caa2.

The three affected banks are:

• Cyprus Popular Bank PCL: Senior unsecured debt and deposit ratings downgraded to Caa2 from Caa1; standalone credit assessment lowered to Ca from Caa3, within the E standalone bank financial strength rating category;

• Hellenic Bank PCL: Deposit ratings downgraded to Caa2 from B3; standalone credit assessment lowered to Caa3 from Caa2, within the E standalone bank financial strength rating category; and

• Bank of Cyprus PCL: Senior unsecured debt and deposit ratings downgraded to Caa2 from Caa1; standalone credit assessment of Caa3 remains unchanged within the E bank financial strength rating category.

Moody's said the downgrades reflect uncertainty regarding the finalization and terms of a Memorandum of Understanding with the International Monetary Fund, the European Union and the European Central Bank, also collectively known as the Troika, to finance bank recapitalizations.

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