NICOSIA, Jan. 28 -- Fitch Ratings has downgraded the Cypriot government bonds to "B" with a negative outlook.

In a press release issued Friday and available in Cyprus on Saturday, the agency says that the downgrade of Cyprus' sovereign ratings partially reflects the agency's view that the size of the government support to the banking sector is likely to be higher than previous Fitch estimates, which mainly focused on the three largest banks.

"The total recapitalisation costs of the banking sector could be up to 10 billion euros," the statement reads.

Moreover Fitch notes that this "would increase the size of the necessary official support program for the Cypriot sovereign to over 17 billion euros. In this scenario Fitch forecasts that government debt to GDP would jump to over 140 percent in 2013".

Excluded from the international capital markets since April 2011, Cyprus applied on June 25 for financial assistance from EU and International Monetary Bank after its two largest banks sought state support following massive losses as a result of the haircut of the Greek sovereign debt.

The Cypriot government and the Troika including the European Commission, the European Central Bank and the International Monetary Bank have reached a premilinary bailout agreement at the end on November last year, but a final agreement will be signed after the next presidential elections scheduled on February 17.