Check Your Country’s Credit
June 5, 2009 by Tisa Silver
Filed under Finance
Even though the U.S. Treasury has never defaulted on a debt, its uber-creditworthy image has definitely been tarnished in recent years. Several economists, domestic and abroad, have predicted a U.S. government default.
When it comes to credit, how do other countries stack up?
Photo by SqueakyMarmot, courtesy of flickr
To assess the creditworthiness of countries, you can look at sovereign credit ratings and country risk ratings.
Below, you will find the top and bottom ten countries according to the March 2009 Country Credit Ratings report.
Top 10 (in order from 1-10): Switzerland, Norway, Luxembourg, Germany, Netherlands, Finland, Denmark, Canada, France, Sweden.
Bottom 10 ( from 168-177): Democratic Republic of Congo, Burundi, Sierra Leone, Sudan, Liberia, Afghanistan, Myanmar, Somalia, North Korea, Zimbabwe.
The United States came in at #15 after falling two slots since the last list was compiled in September 2008.
Not bad, considering the list had 177 countries and the global average score was 45. To put the scores in perspective, Switzerland earned a 94.0 and Zimbabwe scored a 4.0. For the complete list and scores, visit Institutional Investor Magazine.
Not bad is not good enough and hopefully, the U.S. government will continue its default-free existence.
In the meantime, before you invest in any country’s bonds, beware of the risks. A higher rate of return may be promised, but it may not be paid! For a list of the country risk rating components, visit euromoney.com.
