Insider / ΚΥΠΕ
The indicative dates for the 2022 ratings were made public by the rating agencies, thus setting the stage for the “examination” of the Cypriot credit rating next year.
2022 begins with two of the four rating agencies (recognized by the European Central Bank) maintaining the Cypriot debt in a positive outlook. These are Standard and Poor's (BBB-) and DBRS Morning Star (BBB Low). The other two houses, Moody's (Ba1) and Fitch (BBB-) keep the outlook stable.
The Cypriot debt is in the investment grade with the exception of Moody's, which maintains the Cypriot long-term credit rating in the Ba1 rating, one rating below the investment category.
This house is scheduled to open the evaluation cycle with the first indicative evaluation being scheduled for February 18. It is noted that Moody's is presented as the most “sparing” since in recent years it issued only one rating act with the last one on July 23 this year, which upgraded the Cypriot debt to Ba1 with a stable outlook.
It is followed by Standard and Poor's which has set the first indicative rating on March 4, while on March 18 the first rating by Fitch is scheduled. The first round of evaluations is completed by the Canadian company DBRS Morning Star.
However, all four houses believe that pressures to upgrade will be created by the continuation of prudent financial management, which will put the course of public debt in a steady downward trend to pre-coronavirus levels, after the sharp rise in 2020 due to pandemic, as well as the further reduction of non-performing loans and the consequent reduction of risks in the banking system. An additional impetus for upgrades could be the implementation of the reform program through the National Recovery and Sustainability Program. On the other hand, a possible deterioration of the fiscal position, reversal of the declining debt and an increase in NPLs could lead to downgrades.
The second round of ratings starts again with Moody's on August 19 with S&P following on September 2, Fitch on September 16 and finally DBRS Morning Star on October 7.
The dates for the country ratings are indicative and are published according to the European regulation 462/2013 (CR3) in order to give more clarity to the market, while they are always made on Friday.