28 Jun 2013
Fitch downgrades Cyprus to 'Restricted Default' from 'CCC'
FXstreet.com (Córdoba) - Fitch Ratings downgraded Cyprus to 'RD' ('Restricted Default') from 'CCC' on Friday after the government confirmed that a domestic debt swap has been completed.
The downgrade to 'RD' reflects Fitch's opinion that the exchange constitutes a distressed debt exchange (DDE) in line with its criteria and follows the downgrade of Cyprus's LC IDR to 'CCC' from 'B' on 3 June. Fitch has downgraded only the affected domestic bonds to 'D' from 'CCC' and affirmed the rest at 'CCC'.
Cyprus launched an offer to holders of its domestic debt that matures during its three-year bail-out program, with a nominal value of €1 billion, to swap their instruments for longer-dated debt.
With foreign law bonds unaffected by the exchange, the Long-term foreign currency rating has been affirmed at 'B-'with a Negative Outlook.
The downgrade to 'RD' reflects Fitch's opinion that the exchange constitutes a distressed debt exchange (DDE) in line with its criteria and follows the downgrade of Cyprus's LC IDR to 'CCC' from 'B' on 3 June. Fitch has downgraded only the affected domestic bonds to 'D' from 'CCC' and affirmed the rest at 'CCC'.
Cyprus launched an offer to holders of its domestic debt that matures during its three-year bail-out program, with a nominal value of €1 billion, to swap their instruments for longer-dated debt.
With foreign law bonds unaffected by the exchange, the Long-term foreign currency rating has been affirmed at 'B-'with a Negative Outlook.