Link to Fitch Ratings' Report: CyprusLONDON, June 28 (Fitch) Fitch Ratings has downgraded Cyprus's
currency Issuer Default Rating (IDR) to 'RD' ('Restricted
Default') from 'CCC'
following confirmation from the Cypriot government that the
exchange of a number
of domestic law government bonds has been completed.
KEY RATING DRIVERS
The downgrade to 'RD' reflects Fitch's opinion that the exchange
distressed debt exchange (DDE) in line with its criteria and
downgrade of Cyprus's LC IDR to 'CCC' from 'B' on 3 June. Fitch
only the affected domestic bonds to 'D' from 'CCC' and affirmed
the rest at
'CCC'. With foreign law bonds unaffected by the exchange, the
currency IDR has been affirmed at 'B-'with a Negative Outlook.
foreign currency IDR and the Country Ceiling have also been
affirmed at 'B'.
Under the exchange, domestic law bonds with a total nominal
value of EUR1bn that
are due to expire within the EU-IMF programme period (2013-Q116)
replaced by new bonds with the same coupon rates but with the
maturity dates of
the new securities extended to outside the programme period.
constitutes a DDE under Fitch's criteria, as the maturity
extension at existing
coupon rates represents a material reduction in terms for
The settlement date for Cypriot-law exchanged bonds is Monday 1
after completion of the debt exchange and the issue of new
will raise Cyprus's LC IDR out of 'RD' and assign ratings
consistent with the
agency's forward-looking assessment of Cyprus's credit profile
distressed debt exchange. The post- exchange LC IDR and
securities' ratings are
likely to be low speculative grade.
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Media Relations: Peter Fitzpatrick, London, Tel: +44 20 3530
Additional information is available on www.fitchratings.com
Applicable criteria, 'Sovereign Rating Methodology', dated 13
'Country Ceilings' dated 13 August 2012 and 'Distressed Debt
Exchange' dated 08
August 2012 are available at www.fitchratings.com.
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