Bank of Cyprus

Moody’s upgraded Bank of Cyprus mortgage-backed covered bonds from Caa2 to Caa1 yesterday (Thursday) because it upgraded Cyprus’s long term bond ceilings on Friday.

The rating agency upgraded Cyprus’s long term bond ceilings from Caa2 to Caa1, reflecting its view that there is a lower likelihood of the country exiting the euro area, and taking into account the relaxation of capital control measures and the possibility for depositors to use their deposits for debt repayment under certain conditions.

The covered bonds’ Caa1 rating is the highest achievable under Moody’s methodology given an anchor point of the senior unsecured rating and a Timely Payment Indicator (TPI) of “very improbable”.