Credit Rating - Sovereign Credit Ratings

Sovereign Credit Ratings

Further information: List of countries by credit rating

A sovereign credit rating is the credit rating of a sovereign entity, i.e., a national government. The sovereign credit rating indicates the risk level of the investing environment of a country and is used by investors looking to invest abroad. It takes political risk into account

Country risk rankings (June 2012) Least risky countries, Score out of 100 Source: Euromoney country risk
Rank Previous Country Overall score
1 1 Norway 90.37
2 2 Switzerland 88.83
3 3 Singapore 88.03
4 5 Luxembourg 87.90
5 4 Sweden 86.79
6 5 Finland 84.30
7 7 Canada 84.26
8 8 Denmark 83.52
9 9 Netherlands 83.07
10 7 Germany 82.24

The table shows the ten least-risky countries for investment as of June 2012. Ratings are further broken down into components including political risk, economic risk. Euromoney's bi-annual country risk index monitors the political and economic stability of 185 sovereign countries. Results focus foremost on economics, specifically sovereign default risk and/or payment default risk for exporters (a.k.a. "trade credit" risk).

A. M. Best defines "country risk" as the risk that country-specific factors could adversely affect an insurer's ability to meet its financial obligations.

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