International agency "Standard & Poor" / Standard & Poor's / after "Fitch" / Fitch Ratings / announced on Friday lowered the long-term credit rating of Cyprus to the level of "selective default."
The basis for this decision was announced by the government of the republic exchange some government bonds home loan payment term begins next week on the new obligations with longer maturities.
Analysts "Standard & Poor's" recognize that this step will help in the short term alleviate the liquidity problems in Cyprus, but the new bonds are issued with less favorable terms, and this exchange is flawed. The agency said it may raise the rating by one notch Cyprus, if the exchange is completed, as planned.
On Thursday, the government of Cyprus announced prolongation domestic bonds on 1 billion euros, stressing that it is part of an agreement that has been reached with the authorities of the country Eurogroup 25 March on conditions for granting credit in the country 10 billion euros.
Author: Alexey Berazhkou