Here’s what Fitch had to say about Cypriot debt ratings:
The [ratings watch] reflects Fitch’s opinion that the shock resulting from the systemic failure of Cyprus’s banking system will have profound negative implications for the domestic economy, which heightens the risk to public finances.
And as for the cap on any Cyprus-based debt issuance:
Fitch had previously assigned the eurozone common Country Ceiling (‘AAA’) to Cyprus reflecting the prohibition within the currency union on restrictions on cross-border movement of capital. However, the closure of all Cypriot banks last week, along with the likely continuation of deposit transfer restrictions this week represents a de facto imposition of capital controls in Cyprus.
Anyone who is surprised by this has not been paying attention.