S&P lowers Cyprus

Standard & Poor's said it lowered the long-term sovereign credit rating on the Republic of Cyprus to BB from BB+ and affirmed the short-term sovereign credit rating at B.

The agency also said it placed the long-term rating on CreditWatch with negative implications.

The transfer and convertibility assessment for Cyprus, as for all Euro zone members, is AAA, S&P said.

The agency said it continues to hold the view that the government of Cyprus will negotiate a financial support package to recapitalize its banking system to meet the European Banking Association's regulatory minimum.

However, even with this vital assistance, the government will remain in a weak fiscal position due to a banking system that has been unable to cope without government support as a result of its exposure to Greek customers, S&P said.

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