January 10, 2013 / 9:13 PM / 5 years ago

Moody's cuts Cyprus to Caa3 as debt burden set to rise

NEW YORK, Jan 10 (Reuters) - Moody’s Investors Service on Thursday slashed Cyprus’s rating three notches on an expected rise in the Mediterranean country’s debt burden and warned it could cut the rating again.

Moody’s cut Cyprus to Caa3 from B3 with a negative outlook.

“The key driver of today’s rating action is the anticipated rise in the Cypriot government’s debt burden, driven principally by the increased recapitalization needs of its banking system following distressed exchanges on Greek government debt and rising delinquencies on loans to Greek and Cypriot obligors,” Moody’s said in a statement.

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