S&P Downgrades Cyprus

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Standard & Poor’s Ratings Services has lowered its long- and short-term sovereign credit ratings on Cyprus to ‘SD’ (selective default) from ‘CCC/C’, the agency reported Friday.

The move came after the Cypriot government announced an exchange offer on some of its local law governed bonds.

According to S&P, the exchange materially changes the terms of the affected debt and constitutes what the agency considers a distressed exchange.

“We… consider the offer as distressed, rather than purely opportunistic, given limited financing options available to the government and our previous rating on the government’s debt, ‘CCC’,” S&P wrote on its website.

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