Sovereign Credit Rating

Written By Michael Reign on Sunday, December 29, 2013 | 11:57 PM


 
Exists as a terminological appellation synonymous with the deferment of monetary remuneration on a transnational scale, with each respective intergovernmental entity ranked in accordance with a specific alphabetized equivalency. These lettered scripts function as a graded measure of risk relevant to the capability of a nation to engage in acts of investiture with other countries. Rating agencies incorporate a wide variance of contingencies, extenuating factors (Political instability and economic viability are two such determinants used by rating agencies to effectively gauge the risk of default pertaining to a nation’s ability to satisfy the conditions of contractual agreement in relation to the process of debt resolution), and sociopolitical components into a formative exemplar as a means to engender a cumulative equivalency relevant to a particular nation’s creditory standing. A.M. Best, Dun & Bradstreet, Standard & Poor’s, Moody’s, CTRISKS (CTRISKS Rating Limited, also known as CTRISKS, is one of the 7 credit rating agencies licensed in Hong Kong under the Securities and Futures Ordinance. CTRISKS Rating has substantial rating and risk management expertise. Its founders have years of experience in customized ratings for emerging markets), and Fitch Ratings are recognized as the predominant agencies of influence relevant to the determination of a nation’s credit status.


The following itemized listings serve as representational expressions signifying creditory legitimacy on a transnational scale:

Standard & Poor’s Rating Scale (Descending Order: Excellent to Poor Classification)

AAA
AA+
AA
AA-
A+
A
A-
BBB+
BBB
BBB-
BB+
BB
BB-
B+
B
B-
CCC+
CCC
CCC-
CC
C
D
 
Any alphabetical designation lower in significance than a BBB- classification is considered to be speculative in nature in accordance with the Standard & Poor’s Creditory System.
 
Moody’s Rating System (Descending Order: Excellent to Poor Classification)
 
Aaa
Aa1
Aa2
Aa3
A1
A2
A3
Baa1
Baa2
Baa3
Ba1
Ba2
Ba3
B1
B2
B3
Caa1
Caa2
Caa3
Ca
C
 
A.M. Best Rating Demographic (Descending Order: Excellent to Poor Classification)
 
A++
A+
A
A-
B++
B+
B
B-
C++
C+
C
C-
D
E
F
S
 
CTRISKS Rating System (Descending Order: Excellent to Poor Classification)
 
CT3A
CT2A
CT1A
CT3B
CT2B
CT1B
CT3C
CT2C
CT1C
 
Every conceivable CTRISKS grade is mapped in accordance with one-year statistical probabilities of default.
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