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Moody's: Cyprus among the rising stars for investment upgrade

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Moody’s: Η Κyπροσ στ&alpha ; ανερχόμενα αστΕρια για αναβαθμ&iota ;ση σε επενδyσεις

The “potential rising stars” are the states for which the house has a Ba1 credit rating with a positive outlook

Cyprus is a “potential rising star” for the rise of its credit rating in the investment category, notes the rating agency Moody's, citing the significant improvement of the public debt ratio in relation to GDP.

The company's remarks are included in his report on “fallen angels”, as he characterizes the states that saw their credit rating recede to the “junk” category and their return to the investment category.

As the house states in its credit outlook report yesterday, there are “two potential rising stars” in the upgrade zone in the investment category, Cyprus and Paraguay. The “potential rising stars” are the states for which the house has a Ba1 credit rating with a positive outlook.

“Cyprus with the significant reduction in the public debt to GDP ratio and Paraguay with the solid growth and its prudent fiscal policy are the previous fallen angels that have improved credit ratings,” says Moody's in yesterday's bulletin.

Moody's upgraded Cyprus' credit rating to Ba1 on July 23, 2021, an assessment it confirmed on August 19, 2022, assigning a positive outlook from stable. However, the house chose not to issue an appraisal act on March 31, 2023, a date that, based on European regulation (CRA3), it had announced as a potential appraisal date. The next date for a potential rating release is set for September 29.

Regarding the progress of the states that saw their credit rating return to the investment category, the house notes that this return includes improved fiscal and development prospects.

“The states that returned to the investment category demonstrated a significant transformation, including institutional improvements, strengthened public finances and prospects for higher sustainable growth,” the house says.

It also notes that twelve of the states that returned to investment grade took a period of time ranging from less than 3 to around 14 years to achieve this.

According to the house's data, Cyprus' rating is in the non-investment category for 11 years, since March 2012, while Moody's had downgraded the evaluation of the Cypriot debt up to Caa3 (considered an extremely speculative category), at the beginning of 2013, a few months before an agreement to rescue the Cypriot economy with the support package from the EU and the International Monetary Fund.

It is noted that the rest of the international rating agencies recognized by the European Central Bank have already upgraded the Cypriot bond to the investment category for almost five years. The rating agency Standard and Poor's upgraded the credit rating to BBB- in September 2018, Fitch in October 2018 and DBRS Morning Star in November 2018. The current rating of all three agencies is one notch above the investment grade threshold. category.

source: KYPE

Source: 24h.com.cy

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