S&P lifted Cyprus’ rating to BBB- from BB+, citing brighter growth prospects and consolidation in the banking sector.

To take advantage of the positive sentiment following the upgrade, the government mandated banks to sell a 10-year bond.

The investment-grade rating makes Cyprus eligible for ECB bond purchases.

To qualify for quantitative easing, a country needs at least one investment grade rating from S&P, Moody’s, Fitch or DBRS.

All the latter three still rate Cyprus below investment grade.

Yields — the amount of return an investor realizes on a bond — on Cyprus’ five-year bonds slipped as low as 0.83 per cent before trading just above one per cent at the close.

“The Cyprus upgrade adds to the positive picture in the periphery,” said Commerzbank rates strategist Rainer Guntermann.

Source: Cyprus Mail