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.