Moody’s cuts Cyprus ratings by two notches

Moody's Investor Service said it cut the Cyprus sovereign ratings by two notches from Baa1 to Baa3 with possible review for a further downgrade.
The rating agency said the downgrade reflects the high likelihood that Cypriot banks may need state aid to cushion themselves from their exposure to toxic Greek bonds that has been agreed will be subject to a 50% voluntary haircut.

Standard and Poors also downgraded Cyprus sovereign rsatings by one notch last week.