S&P warns risk of Cyprus default "material and rising"

LONDON Wed Feb 20, 2013 6:22am EST

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LONDON Feb 20 (Reuters) - There is a "material and rising risk" that Cyprus will default on its sovereign debt, especially if the euro zone and International Monetary Fund do not come up with aid, rating agency Standard & Poor's said on Wednesday.

"We see at least a one-in-three chance that we could lower the Cyprus sovereign ratings again in 2013, for example if official financial assistance from the ESM and/or IMF is not forthcoming, leaving the Cypriot authorities few choices apart from to restructure its financial obligations," S&P's head of EMEA sovereign ratings Moritz Kraemer said in a report.

"We could also lower the ratings if we believe the (Cypriot) authorities are not able to fulfill the conditions that would be attached to an official assistance programme."

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