Cyprus Cut Three Steps to Caa3 by Moody’s on Bank-Bailout Costs

Cyprus’s credit rating was cut three steps to Caa3 by Moody’s Investors Service, citing the government’s projected increased debt load from the need to recapitalize its banking system.

Nonperforming loans at the nation’s three largest banks rose to 26 percent in September from 19 percent in March, New York-based Moody’s said today in a statement. Recapitalizing those institutions may cost of about 10 billion euros ($13.3 billion), Moody’s said.