S&P boost for Cyprus, Netherlands downgraded
Standard & Poor’s, the international rating agency, raised its long-term sovereign debt rating on Cyprus to B- from CCC+ on Friday, saying the immediate risks to its debt repayments appeared to have receded.
“The stable outlook reflects our view of the implementation risks that remain as the end of the three-year European Commission, International Monetary Fund, and European Central Bank (“Troika”) program approaches, balanced against the upside potential we see coming from Cyprus’ economy,” S&P said in a statement.
Standard & Poor’s however cut the Netherlands credit to AA+ on Friday, removing one of the euro zone’s few remaining triple-A ratings while rewarding Spain for its efforts to reform public finances with an improved stable outlook.
S&P said the Dutch decision, which leaves Germany, Luxembourg and Finland as the only countries in the currency bloc with the top credit rating, was due to a worsening of growth prospects. Both Moody’s and Fitch still rate the Netherlands as triple A.
“The real GDP per capita trend growth rate is persistently lower than that of peers at similarly high levels of economic development,” S&P said in a statement, while affirming the Netherlands’ short-term rating at A-1+.
The agency said it had revised its outlook on Spain, which has worked hard over the past two years to reorder its finances, to stable from negative and affirmed its BBB-/A-3 long and short-term foreign and local currency sovereign credit ratings.
It said Spain’s external position was improving as economic growth gradually resumes.
“Other credit metrics are stabilizing, in our view, due to budgetary and structural reforms, coupled with supportive euro zone policies,” S&P said in a statement.