Cyprus commits non-payment on a redemption of bonds, according to Moody's

FXstreet.com (Barcelona) - the Moody's rating agency said that Cyprus must billion euros in a bond swap by other securities with maturities longer term. The change was made to protect the sustainability of the country.

The new bonds, which hold annual interest between 4.5% and 6%, will expire between 2019 and 2023. Thus, Cyprus save to return the value of these titles in the period 2013-2016, which is when they became due to redeem bonds and the same period in which the country must comply with the demands of Brussels.

Moody's believes that this change requires investors has accept a default, while the Exchange has been made in accordance with the adjustment agreed with the troika program.

However, the Agency has not lowered the credit note of Cyprus and maintains its ratings of bonds 'Caa3', on the fringe of the bausra bond. Standard & Poor's and Fitch lowered if the rating of the country on Friday to 'CCC/C' and 'CCC', respectively.

Furthermore, CE and IMF have seen with good eyes the exchange of Cyprus since they believe that it facilitates the "management of the flow of funds to the Government and ensures adequate funding", which helps the sustainability of public debt.

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