* S&P raises rating on Cyprus by one notch, to 'B'
* Fitch revises outlook to "stable" from "negative"
* No change to bond market timetable - finance minister
* Any new Russia sanctions could temper Cyprus outlook
(Adds finance minister, Russia impact, changes dateline)
NICOSIA, April 25 Credit agency Standard and
Poor's raised its rating on Cyprus to "B" from "B-" on Friday,
saying the Mediterranean nation was faring better than expected
after last year's tumultuous international bailout.
Cyprus was meeting terms set out by its foreign lenders and
risks to its debt repayments were less, the ratings agency said.
It was Standard and Poor's second upgrade of Cyprus since it
came to the brink of financial collapse in March 2013, with a
banking system crippled by its exposure to debt-laden Greece and
no access to international capital markets. It last upgraded
Cyprus six months ago.
The upgrade did not alter Cyprus's timetable on returning to
financial markets, anticipated towards the end of 2015, the
Cypriot finance minister said.
"Despite the continued recession ... prospects are somewhat
brighter than we had anticipated in our last review in November
2013," Standard and Poor's said.
The country had outperformed borrowers' expectations with a
shallower recession than anticipated and better fiscal
performance, likely to be repeated this year, it said.
The agency however said that the possibility of tighter EU
sanctions on Russia, a close business partner and a major source
of tourists, could temper the outlook. Standard and Poor's cut
Russia's credit rating on Friday.
Cyprus, an EU member state, has already stated publicly it
disagrees with further sanctions on Russia.
Standard and Poor's said it might raise Cyprus' rating again
within the next 12 months if it continued to comply with the
measures outlined in a bailout plan agreed with the EU and the
International Monetary Fund (IMF).
Separately, Fitch ratings revised its outlook on Cyprus to
stable from negative on Friday, citing better-than-expected
economic performance and progress in reform implementation.
Fitch rates Cyprus B-, and Moody's Investors' Service at
"We will remain down to earth and are continuing our efforts
with confidence," Cypriot Finance Minister Harris Georgiades
wrote on his Facebook account.
Just a year ago, Cyprus, one of the smallest countries in
the euro zone, became the first nation in the history of the
euro zone to impose capital controls to prevent the collapse of
its banking system.
Cyprus signed up to a 10 billion euro ($14 billion) bailout
programme with the EU and the IMF, on condition that it shut a
major bank and recapitalised a second lender with its clients'
Cyprus may even test international markets earlier than
anticipated to gauge appetite for Cypriot debt, Cypriot
President Nicos Anastasiades told Reuters this month.
Asked if the upgrades were conducive to Cyprus returning to
international markets earlier than envisaged in late 2015,
Georgiades told Reuters there was "no change" in their plans.
(Reporting by Renee Maltezou and Michele Kambas; Editing by