CYPRUS - Cyprus is the latest nation to be slapped with a downgrade by Moody's, with its rating cut two notches over concerns the country is heading towards a bailout.
Moody's said the country's economy has suffered following an accident which destroyed a key power plant earlier this month, and does not expect it to recover for a couple of years.
The ratings agency downgraded Cyprus from from A2 to Baa1 and placed a 'negative' outlook on the country, signalling another downgrade is in the pipeline.
"The main driver of today's two notch rating action is Moody's ongoing concern about Cyprus' fiscal position, which has been amplified by the accidental destruction of the Vasilikos power plant on 11 July 2011 as a result of an explosion at a nearby naval base," said Moody's.
"Although the government has recently announced a range of structural measures intended to improve fiscal sustainability, the positive impact of those measures for the next few years will be reduced by the plant's destruction."
Moody's has reduced its forecasts for Cyprus' economic growth to 0% in 2011 and 1% in 2012.
The firm added another factor behind the downgrade is Cyprus banks' exposure to Greek bonds, which will force the Cypriot government to pump money into the sector.
"Another driver of the downgrade is the material risk the Cypriot government may need to extend capital support to at least some of its banks over the next few years given the substantial exposure of Cypriot banks to a sovereign default and macroeconomic stress in Greece.
"Cypriot banks remain heavily exposed to macroeconomic stress and Greek government bonds - this increases the likelihood these contingent liabilities will crystallise on the Cypriot government's balance sheet."
The People's Pension, Atlas Master Trust and The Cheviot Trust have been granted authorisation from The Pensions Regulator (TPR), taking the total number of authorised master trusts to 18.
Pension schemes have been warned they may now face a more challenging legal test if they wish to fix drafting errors.
The Greene King Pension Scheme has appointed XPS Pensions as its actuarial and investment adviser following a competitive tender process.
Professional Pensions has compiled a list charting the progress of master trust authorisation. View our list in full here...