Fitch downgrades cyprus to “restricted default” – cyprus mail when does the futures market open

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FITCH Ratings has downgraded Cyprus’ long-term local currency Issuer Default Rating (IDR) to “Restricted Default” from “CCC”, following confirmation from the Cypriot government that the exchange of a number of domestic law government bonds has been completed.

According to Fitch, the exchange constitutes a distressed debt exchange (DDE) australian to us dollar exchange rate. It is added that Fitch has downgraded only the affected domestic bonds to “D” from “CCC”, and affirmed the rest at “CCC”.

It is added moreover that under the exchange, domestic law bonds of €1 billion, that are due to expire within the EU-IMF programme period, will be replaced by new bonds with the same coupon rates but with the maturity dates of the new securities extended to outside the programme period.

This transaction constitutes a DDE under Fitch’s criteria, as the maturity extension at existing coupon rates represents a material reduction in terms for bondholders, the announcement notes.


The settlement date for Cypriot-law exchanged bonds is Monday 1 July. Shortly after completion of the debt exchange and the issue of new securities, Fitch will raise Cyprus’ LC IDR out of ‘RD’ and assign ratings consistent with the agency’s forward-looking assessment of Cyprus’ credit profile following the distressed debt exchange.

The cost of getting a new loan, after your first loan has been rated as a “restricted default”, goes up considerably. Who gets all the extra interest that has to be paid on the more expensive second loan required by Cyprus? The banks and financial markets, of course, who lend to Cyprus by buying European Central Bank Bonds. And who pays the extra interest on the second, more expensive “rolled over” loan? The Cypriot taxpayers and home-owners of course.

When a ratings agency declares a “default”, all the players in the financial market (e.g. banks/ hedge funds) who “bet” that Cyprus would “default” (be unable to pay back), get huge payouts from these “bets” -billions of Euros.

How does this “betting” system work? Well, in the same way as you go to the betting shop and place a bet that Real Madrid will win and Barcelona will lose, the financial markets and banks place bets using their depositors’/investors’ money. They make bets on other banks and governments, that they will either “pay” their loan or “default”. (And the financial markets can’t lose these bets; the game has been structured by lawmakers so that taxpayers or uninsured bank depositors will always be forced to pay if financial markets lose their bet).

In the case of Greece, the financial markets had bet a few billion Euros that Greece would default (not be able to pay back its loans) free quotes for car insurance. So the people with the money (banks, hedge funds) tried to ENSURE that Greece went bankrupt AFTER they first took their money out of Greece. That is why criminals like Merkel and Sarkozy did not authorize the Greek Bailout until French and German Banks had first got their money out of Greece usd to can. Then French and German Banks bought billions of Credit Default Swaps. When Greece did default in 2010 and again in 2012, the French and German banks made a killing.

This is the same story in Cyprus cad to usd conversion rate. Merkel and Schäuble (and Rehn and Legarde and Draghi) are working in their own interests against Cyprus. European banks such as criminal lawbreakers Deutsche Bank and Barclays, invest heavily in Credit Default Swaps with hedge funds (called counterparties). The counterparties make their own big profits from these transactions. (Similar to taking out an insurance policy and paying a high premium) gbp to usd exchange rate forecast. When the Cyprus government is declared to be in “restricted default” (unable to pay with its own funds) the European and banks earn billions from their “bets” that Cyprus will default on its loans.

Because hedge funds operate as highly capitalized financial insurance companies, charging massive premiums, they can afford to pay massive payouts to the “betting” banks if they “win” their “bet”. It is an easy game to play – criminals like Merkel and Legarde tell “captive” governments like DISY/DIKO what to do and when to do it (like “match-fixing”).

Now this is the good part. Laiki Bank was allowed to run up €9.2bn debt so that “those in the know” (Draghi’s words) could get their money out before Laiki was deliberately forced into default by the EC/IMF/ECB us to euro exchange rate. Who are those “in the know”? You guessed it: mainly British, French, German, American banks. In the same way as the French and German banks were tipped off about the planned Greece defaults, the European banks were tipped off about the Laiki “default”, the BoC “selective default” and now the Cyprus Government “restricted default”.

BoC has run up almost €4bn of its own Emergency Liquidity Assistance to pay for the Europeans to get their money out. This money must be paid back by BoC together with the €9.2bn Laiki ELA debt. It is in an unsustainable position (Like a man with no money or job being asked to pay his neighbour’s debts).

President Anastasiades is running scared because he sees that ECB President Mario Draghi is much more concerned in helping the Credit Default Swap and Bond Markets than he is in helping Cyprus europe futures trading hours. The markets are the ones who set the price of the Euro on foreign exchange markets. He needs to keep the Euro price steady and avoid a run on Euros. President Anastasiades sees that Cyprus has been thrown to the dogs to save the Euro, as was the case in Greece.

The Troika gave the government €3.1bn of the bailout as a bribe to sign the MOU (the memorandum says: to be used for “governance”, and to be paid back by the taxpayers after 10 years.) But now President Anastasiades finds himself between a rock and a hard place. If BoC goes under, he goes under.

This is why President Ansatasiades went to France last week to see President Hollande exchange rate usd to chf. He is desperate to get the ELA debt converted to a longer term loan, guaranteed by the European Central Banks funny quotes about life and love. He would have told President Hollande: Total Gas will have to write off its investment in Cyprus if the BoC goes under. French jobs will be lost.

He is trying to enlist French anti-austerity support against the Germans who have made it clear their taxpayers will not support struggling European banks. He now realizes Germany stabbed Cyprus in the back by forcing the losses on uninsured bank depositors, regardless of the cost to Cyprus.

Cyprus was used in the first place to show German voters what happens to a country that lives above its means: “Kaput”. The second message from the Cyprus bail-in was sent to those Germans who have money in tax-havens: “The German Government has €2.2 trillion debt. You will pay Mrs Merkel all your tax or you will lose your money.”

What is the risk that German voters will have to pay in if Cyprus defaults on bailout/ bail-in loans? The total owed by Cyprus is about €12bn Emergency Liquidity Assistance (and rising) lent to Laiki/ BoC + €10bn lent to the Cyprus government convert pounds to usd. The Germans will have to pay 27% of the total. The other 16 Eurozone nations cover the rest. This is small change for the Germans.

The Germans are ruthlessly forcing their “business model” on the rest of Europe. In the words of Mario Draghi, Europe will do “whatever it takes”.

The German government has a point to prove to its voters: “Wir sagen Nein”. (We say No). This sounds very similar to what the Cypriots always say: “Ochi”. This word always wins elections, as President Anastasiades learnt in 2004.

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