Standard & Poor’s (S&P) credit ratings by country (2014)

A credit rating is a measure of the credit worthiness of a government, a public entity, or a private corporation. The credit rating is also used as an assessment of the quality of debt instruments issued by any of these organizations.

Credit ratings help assess the risk associated with a financial instrument. It thus gives investors an idea on the fair price of a financial asset.

Simply stated, a credit rating is a score that shows the capacity of the borrowing entity to meet its financial obligations to investors.

Three of the largest credit rating agencies in the world are Standard & Poor’s, Moody’s and Fitch Ratings — accounting for at least 90% of the total credit rating agency industry. Each has its own set of ratings, although they usually have a counterpart for each other’s ratings.

Click here for more information about the equivalent ratings of the 3 credit rating firms.

We monitor each agency’s assessment of the sovereign (or country) ratings. We start with Standard & Poor’s or S&P.

For S&P, a sovereign entity or a debt instrument is considered “investment grade” if its credit rating is BBB- or higher.

Those rated BB+ and below are considered to be speculative grade, also referred to as “junk” status.

S&P credit ratings by country: AAA to A-

Here are sovereign states ranked with the High to Highest quality of credit ratings. These countries have Strong to Extremely Strong capacity to meet its financial obligations.

S&P credit ratings by country: BBB+ to BBB-

The following countries are rated “Medium grade”, with adequate capacity to meet its financial obligations, although adverse conditions or changing circumstances are more likely to lead to a weakened capacity to meet financial commitments.

S&P credit ratings by country: BB+ to BB-

The following are rated “Lower medium grade”, which are countries less vulnerable but faces major ongoing uncertainties and exposure to adverse conditions which could lead to inadequate capacity to meet financial commitments.

S&P credit ratings by country: B+ to B-

These sovereign states are rated “Low grade” and are more vulnerable and have adverse business, financial, or economic conditions will likely impair its capacity or willingness to meet financial commitments.

S&P credit ratings by country: CCC to D

These countries states are “Poor quality grade” and are currently vulnerable to non-payment while payment is dependent upon favorable conditions to meet financial commitments. Sovereign states rated D or SD have actually failed to pay one or more of its obligations.

Must read these other awesome educational articles:

• S&P gives Philippines 2nd investment grade rating after Fitch
• Equivalent tables of S&P, Fitch and Moody’s credit ratings
• Philippines now investment grade, with Fitch Ratings upgrade
• Impact of the U.S. credit ratings downgrade by S&P