S&P Revises Cyprus' Outlook to Stable

Credit rating agency Standard & Poor`s revised the outlook on the long-term rating on Cyprus to stable from negative, saying that the immediate risk of a sovereign default has receded. At the same time, S&P affirmed the CCC/C' long- and short-term sovereign credit ratings on Cyprus, noting that that the program implementation and economic risks remain considerable.

    "We expect the Cypriot government will agree to the terms of an up-to a 10 billion financial assistance program from the International Monetary Fund (IMF) and the European Stability Mechanism (ESM)" S&P said on Wednesday.

It is added that the program's first loan tranche will be disbursed in time for the government to make a June 4 payment due on a Eurobond.

Moreover, the ratings agency says it expects Cyprus to remain a member of the Eurozone, adding however the likelihood of recently-imposed capital controls to remain, in some form, in order to protect the country's banks from renewed deposit flight. (CNA)