Moody's raises Cyprus outlook, confirms rating

The Moody's ratings agency has raised its outlook for Cyprus to positive, while confirming the island's Caa3 credit rating. The agency said on Friday it was raising the outlook to positive from negative because of a stronger than expected fiscal and economic performance in 2013 and because of the authorities' record of meeting conditions set by international creditors. But the country's middle-range junk bond status was being confirmed because of "the persistent risks that remain to Cyprus's public finances and their sustainability over the medium term as a result of significant uncertainties to the prospects for the macroeconomy and banking sector," Moody's said in a statement. Moody's downgraded Cyprus to Caa3 from B3 in January 2013. In all, it had downgraded Cyprus's rating nine notches in 10 months. After years of prosperity, Cyprus was hit by a financial earthquake more than a year ago, finding itself on the verge of bankruptcy because of the high exposure of its banks to Greek debt. It was granted a 10-billion-euro ($13.8-billion) international bailout in March 2013, almost half of which has now been paid out.