Interact with our Sovereign Risk Indicators - March 2014, which contain comparative statistics for rated sovereigns. They include economic measures, fiscal and debt indicators, balance-of-payments information, and external balance sheet data.

Sovereign Government Rating Methodology And Assumptions
The sovereign rating methodology (we use "criteria" and "methodology" interchangeably here) addresses the factors that affect a sovereign government's willingness and ability to service its debt on time and in full. The analysis focuses on a sovereign's performance over past economic and political cycles, as well as factors that indicate greater or lesser economic policy flexibility in future economic cycles.

 

SPOTLIGHT

  • Apr 11, 2014

Standard & Poor's Ratings Services, in rating a sovereign, often views membership in a monetary union as "credit positive," under its criteria. Accordingly, we typically raise the sovereign ratings on eurozone accession prospects, as was the case with Lithuania. This shows that our criteria are not biased against eurozone sovereigns. Being a member is in most cases likely to benefit a sovereign's … More

  • Mar 28, 2014
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Standard & Poor's Ratings Services currently rates 128 sovereign governments and has established transfer and convertibility (T&C) assessments for each country with a rated sovereign, as shown in the table below. A T&C assessment is the rating associated with the likelihood of the sovereign restricting nonsovereign access to foreign exchange needed for debt service. For most countries, Standard & … More

  • Mar 10, 2014

The economic crisis in the periphery of the eurozone weakened confidence in sovereigns' and banks' creditworthiness. Supported by liquidity facilities from the European Central Bank (ECB), banks in Spain, Greece, Portugal, and Italy have increased their exposure to sovereign securities of their home nations. This has furthered the link and negative feedback loop between banks' and sovereigns'… More

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  • Apr 11, 2013

Standard & Poor’s has published its sovereign default and ratings transition study annually since 1999. In this CreditMatters TV segment, John Chambers, chairman of the sovereign rating committee, highlights the key findings of the 2012 study, including how our updated data illustrates a higher… Watch

  • Feb 27, 2014

Standard & Poor's Ratings Services projects that the 127 rated sovereigns globally will borrow an equivalent of $7.1 trillion from long-term commercial sources in 2014 (for a full list and respective ratings see "Sovereign Ratings And Country T&C Assessments," published Feb. 21, 2014, on RatingsDirect). This would be a 2.7% increase in long-term commercial debt issuance compared with… More

  • Feb 04, 2014

We have found that our outlooks and CreditWatch listings on sovereign ratings have been useful indicators of future rating actions. Since we began assigning outlooks to our ratings in 1989, we have never lowered a sovereign rating with a positive outlook. On the other hand, we have raised 173 out of 242 sovereign ratings with positive outlooks. (The ratings we refer to throughout this article… More

  • Jan 24, 2014

With recessionary conditions slowly being replaced by a broader, yet still modest, recovery in Europe, corporate rating actions turned more favorable toward the last quarter of 2013. Rating upgrades outpaced downgrades in the fourth quarter for only the second time since the beginning of the 2008 recession. We upgraded 32 companies and downgraded 29 in fourth-quarter 2013. In comparison, there … More

  • Dec 17, 2013

As we enter 2014, the global credit picture for sovereigns is broadly similar if slightly less negative than a year ago. We have fewer negative outlooks on its long-term foreign currency sovereign ratings, but they still exceed positive outlooks in all regions on the 129 sovereign governments we rate globally. The less negative outlook balance today, compared to a year ago, does not suggest an … More

  • Mar 24, 2014

"Sovereign Risk Indicators" contains comparative statistics for rated sovereigns. Tables 1-4 include economic measures, fiscal and debt indicators, balance-of-payments information, and external balance sheet data. To view the full data set, please click on the "View Expanded Table" tab at the top of each table. A glossary at the end of this article explains the reported concepts.An … More

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  • Mar 06, 2014
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After an extended period of optimism, emerging market sovereign bond markets have weakened. In this CreditMatters TV segment Sovereign Chief Rating Officer Moritz Kraemer explains why it is likely to be the domestic policy outlook that will determine the future trajectory of emerging economies',… Watch

  • Mar 05, 2014

Since the U.S. Federal Reserve first announced its intention to gradually tighten monetary conditions in mid-2013, the torrent of capital that had been flowing into emerging markets has slowed to a trickle. Indeed, with the Fed's so-called "tapering" now in full swing, based on its view of the growing momentum behind the U.S. recovery, global liquidity conditions have tightened appreciably. At… More

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  • Jun 27, 2013
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Standard & Poor’s Rating Services has published an update of its sovereign criteria. In this Credit Matters TV segment, Olga Kalinina, Global Criteria Officer – Sovereigns, explains why the criteria has been updated and what the rating impact is expected to be. Watch

  • Feb 10, 2014

In a recent discussion paper from the University of Heidelberg's Department of Economics ("The Home Bias in Sovereign Ratings," December 2013), the authors claim "the existence of a home bias in sovereign ratings." According to the authors, Andreas Fuchs and Kai Gehring, home bias exists for a number of rating agencies headquartered in six … More

  • Jan 29, 2014

Some signs are emerging that the eurozone (European Economic and Monetary Union or EMU) is starting to overcome the economic, financial, and budgetary stress that it has endured in recent years. Rising exports are leading to a rebalancing of debtor economies in the eurozone. We think this year could also see the return of some so-called "program countries" (EMU member states that have… More

  • Jan 23, 2014

China has started to shed more light on its shadowy public finances. In December 2013, the National Audit Office (NAO) reported that the Chinese government had chalked up total debts of Chinese renminbi (RMB) 19.1 trillion (US$3.1 trillion) by the end of 2012. That's about 36.7% of China's GDP that year. It's also more than double the RMB7.8 trillion in outstanding central government bonds at… More

  • Jul 08, 2013

The events of the last several years highlighted the role of credit ratings agencies in assessing sovereign creditworthiness. We are publishing this article to explain the basics of Standard & Poor's Ratings Services' sovereign rating methodology, and our sovereign rating process in general. Sovereign government bonds, which represent more than 40% of the stock of bonds issued globally,… More

REGIONAL & COUNTRY SPOTLIGHT

  • Apr 15, 2014

The current Indian parliamentary elections could have a significant impact on institutional and governance settings in the country over the next few years. The winners of the election and the composition of the next national government remain unclear. However, the new government's policy decisions and their impact on economic growth prospects and fiscal health will have important implications on… More

  • Apr 11, 2014

On April 11, 2014, Standard & Poor's Ratings Services revised its outlook on the Republic of Lebanon to stable from negative. At the same time, we affirmed our 'B-/B' long- and short-term foreign and local currency sovereign credit ratings. More

  • Apr 07, 2014
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China and Japan both stand at crossroads, facing pressing needs for reforms. China will be tested to keep growing at a robust clip as it attempts to rebalance its economy. Japan is trying to shed the shackles of deflation and improve its growth prospects, but vital structural reforms have yet to materialize. In our view, the success or failure of these reforms will likely shape sovereign credit… More

  • Feb 27, 2014

Scotland's electorate will go to the polls to vote in a referendum on independence on Sept. 18, 2014. If the "yes" vote wins, the new government of Scotland and the remaining U.K. will enter negotiations on issues such as the allocation of liabilities and assets and the monetary regime, among others. We are often asked how we would rate a newly independent sovereign Scotland. Our views on the… More

  • Feb 18, 2014

Political instability in Bangladesh and Thailand has been in the news since late 2013. The main opposition parties in both countries boycotted the respective elections called early in 2014, thereby weakening their legitimacy and undermining the strength of the democratic process. If elections there are concluded, the Bangladeshi government and the next elected Thai government could face… More

  • Jan 17, 2014

Latin America is poised for an uptick in economic growth this year and generally stable sovereign and local government credit quality as global economies improve, but pockets of weakness remain. More

  • Dec 30, 2013

This calendar sets out publication dates for sovereign, regional, and local government ratings and related outlooks as required by the European Union Regulation (the "EU CRA Regulation") on credit rating agencies (Regulation (EU) No 1060/2009 on credit rating agencies, as amended by Regulation (EU) No 462/2013). More

  • Dec 03, 2013

The eurozone is only a moderately open economy in its entirety--only slightly more than a quarter of GDP was exported outside the region in 2012. For that reason, a reduction of the German surplus would pave an easier way for the external adjustment of the economies on the periphery of the eurozone. That's because the exports of goods and services of one economy correspond by definition to the… More

  • Jan 23, 2014

China has started to shed more light on its shadowy public finances. In December 2013, the National Audit Office (NAO) reported that the Chinese government had chalked up total debts of Chinese renminbi (RMB) 19.1 trillion (US$3.1 trillion) by the end of 2012. That's about 36.7% of China's GDP that year. It's also more than double the RMB7.8 trillion in outstanding central government bonds at… More

  • Dec 19, 2013

The Mexican Congress and state legislatures just passed a constitutional amendment to open the energy sector to private investment. This is a watershed moment for Mexico. The energy sector has been effectively closed to private investment during the past 75 years. The amendment requires the passage of important secondary legislation next year, and successful implementation of this reform in… More

  • Nov 29, 2013

On Nov. 29, 2013, Standard & Poor's Ratings Services affirmed the 'AA-' long-term and 'A-1+' short-term sovereign credit rating on the People's Republic of China. The outlook on the long-term rating is stable. In line with this, we are affirming our Greater China regional scale rating at 'cnAAA/cnA-1+'. Our transfer and convertibility (T&C) assessment is… More

  • Apr 11, 2014

On April 11, 2014, Standard & Poor's Ratings Services revised its outlook on the Republic of Albania to stable from negative. At the same time we affirmed our 'B/B' long- and short-term sovereign credit ratings on Albania. More

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  • Apr 11, 2014
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Finland's persistent subpar growth rate reflects deep structural, demographic, and economic imbalances that hamper the government's efforts to achieve fiscal consolidation. In this CMTV, Managing Director, Moritz Kraemer, explains the rationale behind Standard & Poor’s Ratings Services’ affirmation … Watch

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  • Apr 08, 2014

In this CreditMatters TV segment, Kim Eng Tan, Senior Director for Asia-Pacific Sovereign Ratings, shares his views on the comparison of sovereign credit fundamentals in China and Japan. Watch

  • Feb 21, 2014

The downgrade reflects the substantial deterioration of the political situation in Ukraine. This will likely raise uncertainty regarding the continued provision of Russian financial support over the course of 2014, and puts the government's capability to meet debt service at increasing risk. When we lowered the long- and short-term foreign currency ratings on Ukraine to 'CCC+/C' on Jan. 28,… More

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  • Jan 27, 2014
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In this CreditMatters TV segment, Kim Eng Tan, Senior Director and Head of Asia-Pacific Sovereign Ratings, shares his views on whether the findings from the latest China’s government debt audit affect its sovereign ratings. Watch

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  • Feb 27, 2014
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The 17 sovereigns S&P rates will borrow sharply more than last year, up 49% to US$61bn. In this CreditMatters TV segment, Standard & Poor’s Director, Ravi Bhatia discusses Africa’s borrowing needs in 2014. Watch

  • Dec 27, 2013

Additional European rules on credit rating agencies came into effect on June 20, 2013 (amending Regulation (EU) No 1060/2009, the "EU CRA Regulation"). Some of these new rules, which apply to all credit rating agencies registered in the European Union, are specifically intended by policymakers to increase the transparency and predictability of sovereign ratings. More

  • Nov 20, 2013

China's new leadership appears to be taking decisive steps to tackle soaring debt levels at local and regional governments (LRGs). The recent plenum of the Communist Party culminated in a reform blueprint that Standard & Poor's Ratings Services believes could lower the financial, economic, and fiscal risks to sovereign creditworthiness if it's implemented effectively. That's partly because … More

  • Dec 20, 2013

We view the European Union (EU) as the most prominent of the European supranationals. Founded in 1958 by the Treaty Establishing the European Community (The Treaty of Rome), the EU manages a common budget for its members. The EU borrows on the capital markets to lend funds to member states and certain third countries on a back-to-back basis, as well as to fund lending for other programs such… More

  • Nov 08, 2013

The downgrade reflects our view that the French government's current approach to budgetary and structural reforms to taxation, as well as to product, services, and labor markets, is unlikely to substantially raise France's medium-term growth prospects. Moreover, we see France's fiscal flexibility as constrained by successive governments' moves to increase already-high tax levels, and what we… More

WEBCASTS & EVENTS

  • Held on Feb 06, 2014

We discussed how the link between sovereign and bank credit risk is evolving in the Eurozone.


Held on Thursday, February 6, 2014

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  • Held on Mar 12, 2014

We discussed rating trends, elections, and economic challenges facing Central America (including Guatemala, El Salvador, Honduras, Costa Rica, Belize) and Panama.


Held on Wednesday, March 12, 2014

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