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Interact with our Sovereign Rating Methodology (updated Dec. 23, 2014)
This methodology applies to issuer and issue ratings on all sovereign governments. All references to sovereign ratings in this article pertain to a sovereign's ability and willingness to service financial obligations to nonofficial (commercial) creditors.
Credit FAQ: An Overview Of The Dec. 23, 2014, Sovereign Criteria Update
VIDEO: Standard & Poor's Revises Sovereign Rating Methodology
Calendar Of 2015 EMEA Sovereign, Regional, And Local Government Rating Publication Dates
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).
On Feb. 13, 2015, we lowered our long-term foreign and local currency sovereign credit ratings on the Republic of Angola to 'B+/B' from 'BB-/B', due to a sharp decline in oil prices. The outlook is stable. More
On Feb. 13, 2015, we affirmed our 'AA/A-1+' long- and short-term foreign and local currency sovereign credit ratings on Kuwait, despite the recent sharp decline in oil prices. The outlook is stable. More
Standard & Poor’s Ratings Services held a live audio Webcast and Q&A on Wednesday, Feb. 11, 2015, at 10:00 a.m. Eastern Time, where we discussed the impact of the fall in oil prices on sovereign ratings.
Standard & Poor's Ratings Services has updated its price assumptions for Brent and West Texas Intermediate crude oil, as well as its Henry Hub natural gas price assumption. We updated the prices (see table) in accordance with the methodology set forth in "Methodology For Crude Oil And Natural Gas Price Assumptions For Corporates And Sovereigns, published Nov. 19, 2013. The further downward… More
In view of the sharp fall in international oil prices in recent months, we have significantly lowered our oil price assumptions for 2015-2018. Given its high dependence on oil, Saudi Arabia's currently very strong fiscal position could weaken owing to the oil price decline. We are therefore revising our outlook on the long-term ratings on Saudi Arabia to negative from stable and affirming our… More
In view of the sharp fall in international oil prices in recent months, we have revised our oil price assumptions for 2015-2018 significantly downward. In our view, the decline in oil prices has a significant impact on the outlook for the fiscal and external positions of the Republic of Congo, given its high dependence on oil. For example, we now forecast a fiscal deficit equivalent to 1% of GDP… More
In view of the sharp fall in international oil prices in recent months, we have revised down our oil price assumptions for 2015-2018 significantly. We currently expect an average Brent oil price of $55 per barrel in 2015 and $70 per barrel in 2015-2018. In our opinion, the decline in oil prices has a moderate negative impact on Qatar's economic growth outlook. We now forecast the real GDP growth… More
The Venezuelan government's failure to take timely corrective actions to address growing economic distortions has contributed to economic deterioration and shortages of foreign exchange. Economic recession, high inflation, and growing shortages have weakened public support for the government, likely reducing its political room to introduce difficult corrective economic measures that would improve … More
In view of the sharp fall in international oil prices in recent months, we have revised our oil price assumptions for 2015-2018 significantly downward. In our view, the decline in oil prices has a significant impact on the outlook for Oman's fiscal and external positions, given its high dependence on oil. For example, we now forecast a fiscal deficit equivalent to 4% of GDP in 2015, following… More
On Jan. 26, 2015, we lowered our long- and short-term foreign currency sovereign credit ratings on the Russian Federation to 'BB+/B' from 'BBB-/A-3'. We also lowered the long- and short-term local currency sovereign credit ratings to 'BBB-/A-3' from 'BBB/A-2'. More
On Feb. 13, 2015, we lowered our long-term foreign and local currency sovereign credit ratings on the Gabonese Republic to 'B+' from 'BB-' due to falling oil prices. The outlook is stable. More
Since Feb. 5, we have reviewed the ratings on 13 oil exporting sovereigns. In this report, we discuss the ramifications of falling oil prices on these countries. More
In view of the sharp fall in international oil prices in recent months, we have revised our oil price assumptions for 2015-2018 significantly downward. In our view, the decline in oil prices has a significant impact on the outlook for Nigeria's external position. We now forecast Nigeria to run a current account deficit of 1.4% of GDP in 2015-2018. Political risks also remain significant. More
Following the sharp fall in international oil prices in recent months, we have significantly lowered our oil price assumptions for 2015-2018. Given expenditure constraints, we now expect that Bahrain's fiscal deficit will deteriorate markedly, averaging 5.5% of GDP over 2015-2017, versus 3.8% of GDP in our December 2014 review. Consequently, we are lowering our sovereign credit ratings on Bahrain … More
In view of the sharp fall in international oil prices in recent months, we have revised our oil price assumptions for 2015-2018 significantly downward. In our opinion, the decline in oil prices materially affects the outlook for Kazakhstan's economic growth and external and fiscal balances, given its high dependence on oil. We now forecast real GDP growth will slow to 1.5% in 2015, and on a per… More
On Oct. 3, 2014, Standard & Poor's Ratings Services affirmed its 'AA' long-term and 'A-1+' short-term foreign and local currency sovereign credit ratings on the Emirate of Abu Dhabi, a member of the United Arab Emirates (UAE). The outlook is stable. More
We have lowered our oil price assumptions for 2015-2018 owing to a sharp fall in international oil prices in recent months. We currently expect Brent oil prices to average US$55 per barrel in 2015 and US$70 per barrel in 2015-2018. In our view, the decline in oil prices has a moderate negative impact on Malaysia's fiscal position, given that government revenue has a high dependence on the energy… More
In view of the sharp fall in international oil prices in recent months, we have revised our oil price assumptions for 2015-2018 significantly downward. In our view, however, the decline in oil prices has only a moderate impact on the outlook for economic growth and the fiscal and external positions of Cameroon. Consequently, we are affirming the ratings on Cameroon at 'B/B'. More
Lack of monetary and exchange-rate flexibility, as well as fiscal and external vulnerability to a prolonged period of low oil prices, constrain the rating on Ecuador. We expect Ecuador's government to pursue pragmatic economic policies to contain the impact of low oil prices on fiscal revenues and the balance of payments. More
On April 17, 2015, we affirmed our 'BB+/B' long- and short-term foreign currency sovereign credit ratings and our 'BBB-/A-3' long- and short-term local currency sovereign credit ratings on Russia. The outlook remains negative. More
On April 17, 2015, we affirmed our 'B+/B' long- and short-term foreign and local currency sovereign credit ratings on the Republic of Kenya. The outlook is stable. More
On April 15, 2015, we lowered our long- and short-term sovereign credit ratings on the Hellenic Republic (Greece) to 'CCC+/C' from 'B-/B'. At the same time, we removed these ratings from CreditWatch, where it had placed them with negative implications on Jan. 28, 2015. The outlook is negative. More
The Ukrainian government has announced its intention to restructure its foreign currency commercial debt. Under our criteria, we expect we would classify an exchange offer or similar restructuring of Ukraine’s foreign currency debt as tantamount to default. As a result, we are lowering our long-term foreign currency ratings on Ukraine to ‘CC’ from ‘CCC-’. More
On March 20, 2015, we lowered our long-term foreign and local currency sovereign ratings on the Federal Republic of Nigeria to 'B+' from 'BB-'. We affirmed the short-term ratings at 'B'. More
The rating action reflects our view that the risk profile of Andorra's financial sector, which is large relative to the size of the domestic economy, has increased beyond our expectations. Risks are higher after the U.S. Department of the Treasury's Financial Crimes Enforcement Network’s (FinCEN) announcement that it has started a rule-making proposal concerning Banca Privada d'Andorra (BPA),… More
On March 13, 2015, we affirmed our unsolicited ‘AAA/A-1+’ long- and short-term foreign and local currency sovereign credit ratings on the Kingdom of Sweden. The outlook is stable. More
We project that the 129 sovereigns it rates will borrow an equivalent of $6.7 trillion from long-term commercial sources in 2015. This would be a 5.7% decrease in long-term commercial debt issuance compared with 2014. More
As economies globally have become more integrated in recent years, they also have become more vulnerable to financial and economic shocks that spread wider and faster than ever before. At the same time, there has been little global coordination of economic policies and more confusion about the appropriate policies to manage common economic risks.
On Feb. 6, 2015, we lowered our long-term sovereign credit rating on the Hellenic Republic (Greece) to 'B-' from 'B'. The long- and short-term ratings on Greece remain on CreditWatch with negative implications. More
On Jan. 30, 2015, we revised our outlook on the Republic of Azerbaijan to negative from stable. At the same time, we affirmed the 'BBB-/A-3' long- and short-term sovereign credit ratings on Azerbaijan. More
In this CreditMatters TV segment, Frank Gill, Senior Director, discusses the rating implication for sovereigns if the increasing profile of Eurosceptic parties were to lead to election victory. Watch
Popular support for Eurosceptic parties has risen across Europe. Here, we examine the rating implications for sovereigns of the increasing influence of Eurosceptic parties. More
When one considers what drives bond prices--such as interest rates, liquidity conditions, currency movements, and investors' attitudes toward risk--creditworthiness comes pretty far down the list at the higher end of the ratings spectrum. More
Standard & Poor's Ratings Services has updated the GDP per capita thresholds that it uses to determine the initial economic assessment in its sovereign rating criteria (see "Sovereign Rating Methodology," Dec. 23, 2014). The levels listed in the table are almost 2% higher than they were in our last update, which was in June 2013. The increases reflect the global developments in nominal US$ GDP… More
"Sovereign Risk Indicators" contains comparative statistics for rated sovereigns, dated December 15, 2014. More
Despite half a decade of macroeconomic adjustment and recalibration, the imbalances within the eurozone remain significant. Standard & Poor's Ratings Services estimates that Spain, Italy, Greece, and Portugal—the eurozone's top-four external debtor nations—will owe a total of €1.85 trillion to non-residents by the end of 2014, compared with €875 billion a decade earlier. More
The International Monetary Fund (IMF) has recently set out proposals that would allow it to call for governments to reprofile their sovereign commercial debt of uncertain sustainability as a condition for accessing certain IMF funding programs. Reprofiling typically entails an extension of debt maturities without reduction of principal. The extension is usually accomplished through a debt… More
On Oct. 22, 2014, Standard & Poor's Ratings Services said that it sees the beginnings of a new phase in the lingering eurozone crisis, where the worst may be over, but the difficult job of tending to unfinished business lies ahead, in a report published, "The Eurozone Crisis Is Still Not Over Yet." More
Domestic credit has boomed in Latin America over the last decade, thanks to solid economic growth, macroeconomic stability, and an expanding middle class with more formal employment. Four Latin American countries stand out, however, for their high credit growth rates both in absolute and relative terms: Bolivia, Brazil, Colombia, and Paraguay. More
Standard & Poor's Ratings Services publishes its Sovereign Ratings Score Snapshot every month. Standard & Poor's analysis of sovereign creditworthiness rests on its assessment and scoring of five key rating factors: (i) institutional and governance effectiveness; (ii) economic structure and growth prospects; (iii) external liquidity and international investment position; (iv) the average of… More
Since the turn of the century, two mega-trends have emerged to dominate public discussion on global economic risks. The first, global aging, is comparatively well-understood and the consequences relatively clear. The second, the impact of climate change, is far hazier and the potential outcomes much more challenging to predict. More
Standard & Poor's Ratings Services has updated its data on the performance and default rates of sovereign ratings through year-end 2013. (1) From our reading of the data, we conclude that, in general: The relative rank ordering of sovereign ratings has been consistent with historical default experience, except for the 'A' category for periods beyond seven years, which reflects the defaults of… More
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
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, are a… More
On April 17, 2015, we affirmed our 'BBB-/A-3' long- and short-term foreign and local currency sovereign credit ratings on the Kingdom of Morocco. The outlook is stable. More
On April 17, 2015, we affirmed our 'BB-/B' long- and short-term foreign and local currency sovereign credit ratings on the Republic of Macedonia. The outlook is stable. More
The affirmation reflects what we consider to be balanced risks to Spain's economic recovery and its credit metrics ahead of this year's regional and general elections. More
In our view, Luxembourg's wealthy economy has relatively strong growth prospects, backed by an effective institutional framework and governance, and a strong net external creditor position. Despite the economy's exposure to the financial services sector and related regulatory risk, we believe the government will maintain an overall solid budgetary position, reducing deficits as of 2015. We are… More
LONDON (Standard & Poor's) March 18, 2015--Standard & Poor's Ratings Services said today that the outcome of yesterday's elections in Israel has no immediate effect on its sovereign credit ratings on Israel (A+/Stable/A-1). The election results confirm our view of the country's lack of governmental stability. This arises from complex and frequently unstable coalition governments that reflect an… More
On March 13, 2015, we said that our 'B-/B' long- and short-term sovereign credit ratings on the Hellenic Republic (Greece) remain on CreditWatch with negative implications where they were placed on Jan. 28, 2015. More
On March 13, 2015, we affirmed our 'B/B' long- and short-term foreign and local currency sovereign credit ratings on Bosnia and Herzegovina (BiH). The outlook is stable. More
Despite the high tension surrounding a possible Greek exit from the Eurozone, Standard & Poor's Ratings Services considers the risks to other Eurozone member sovereigns in this scenario would be moderate. Frank Gill, Senior Director, highlights how offsetting factors, such as a more robust Eurozone … Watch
In this article, we discuss the possible implications of a Greek exit from the Eurozone (European Economic and Monetary Union), including the likelihood of Greece defaulting on its sovereign debt and the direct contagion risk on other Eurozone sovereigns. More
The decision by the European Central Bank (ECB, AAA/Stable/A-1+) to engage in a large quantitative easing (QE) program supports our assessment that the bank can and will use its significant monetary flexibility to achieve its objectives and thus bolster its credibility, even though it is similar in size to the original programs of the U.S. Federal Reserve System (AA+/Stable/A-1+) and the Bank of…
We expect economic growth in Poland will be broad-based, leading to a convergence of Polish incomes with those of wealthier EU states. Poland's sound macroeconomic management, stable public finances, and moderate external financing needs also underpin growth prospects. We are therefore revising our outlook on Poland to positive and affirming the 'A-/A-2' foreign currency and 'A/A-1' local… More
On Jan. 30, 2015, we affirmed our 'A/A-1' long- and short-term foreign and local currency sovereign credit ratings on the Slovak Republic (Slovakia). The outlook remains positive. More
Standard & Poor's Ratings Services publishes a global sovereign ratings outlook twice a year, which includes rating and outlook trends. In conjunction with this report, we publish regional outlooks for emerging markets, Asia-Pacific, Latin America, Central and Eastern Europe, the Commonwealth of Independent States (CIS), the eurozone, the Middle and East North Africa, and Sub-Saharan Africa. We… More
Pedro Cruz Villalón, an advocate general at the European Court of Justice (ECJ), has published an opinion that we interpret as broadly favorable regarding the European Central Bank's (ECB's) initiatives aimed at securing the integrity of the eurozone and enabling the currency area to move toward its inflation target. More
Additional European rules on credit rating agencies came into effect on June 20, 2013. Some of these 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
The eurozone appears to be in a contradictory state of affairs. Long-term government bond yields have dropped to all-time lows, despite increases in government debt. More
Despite half a decade of macroeconomic adjustment and recalibration, the imbalances within the eurozone remain significant. In this CreditMatters TV, Moritz Kraemer, Chief Ratings Officer (Sovereign Ratings), explains what progress has been made on the rebalancing process of creditors and debtors. Watch
Negative geopolitical events appear to be dominating news bulletins even more abundantly than usual at present. Some commentators refer to a new "cold war" between Russia and the West, triggered by events in Eastern Ukraine and the unilateral integration of Crimea into Russia. In the Middle East a new terrorist threat is emerging in the form of Islamic State of Iraq and Syria (ISIS), which, in… More
On Aug. 23, 2013, the U.S. Federal Court of Appeals of the Second Circuit ruled in favor of NML Capital Ltd., a hedge fund unit holding defaulted Argentinian government bonds that had rejected an exchange offer and sued for full repayment of its debt. A number of investors have since voiced concerns that the ruling against Argentina may complicate the process for other countries emerging from a… More
On Oct. 1, 2013, we published a commentary titled "The Eurozone Crisis Isn't Over Yet." In that article, we explained our view that "we see a risk that the currently favorable market conditions could allow governments to pull back from their fiscal consolidation efforts and growth-enhancing structural reforms, thereby jeopardizing further progress on deleveraging and the rekindling of growth.… More
Since the onset of the eurozone crisis half a decade ago, policy response to it has been preceded by complex negotiations between member states with differing national interests. The institutional complexity of reaching a mutually agreeable and decisive policy response has unsurprisingly led to numerous compromises. At times, those compromises were perceived as having blunted the effectiveness… More
Government bond markets in the eurozone have rallied since the depths of the sovereign debt crisis in 2011 and 2012. Yields have declined ever since European Central Bank President Mario Draghi said the bank will do "whatever it takes to preserve the euro" on July 26, 2012. Since early this year, sovereign issuers on the so-called periphery have been able to borrow at or close to all-time lows.… More
In this CreditMatters TV segment, Standard & Poor’s Chairman of the Sovereign Ratings Committee John Chambers discusses the key takeaways from our sovereign default and rating transitions study for 2013. Highlights include sovereign foreign-currency cumulative average default rates and ‘AAA’… Watch
Standard & Poor's Ratings Services currently rates 129 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
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
Standard & Poor’s Ratings Services held an interactive, live audio Webcast and Q&A on Wednesday, April 1, 2015, at 10:00 a.m. Eastern Daylight Time we discussed the implications on sovereign ratings in China as the government strikes to balance the reforms against the need for supporting near-term growth.
Standard & Poor’s Ratings Services held a live audio Webcast and Q&A on Wednesday, March 4, 2015, at 10:00 a.m. Eastern Time where we discussed the implications on sovereign ratings in Greece and the wider Eurozone following Athens’ difficult negotiations with its creditors.
Standard & Poor’s Ratings Services held a live audio Webcast and Q&A on Wednesday, Jan. 7, 2015, at 10:00 a.m. Eastern Time, we discussed the recently published update of the sovereign ratings methodology.
Standard & Poor’s Ratings Services held an interactive, live video webcast on Wednesday, August 6, 2014, at 10:00 a.m. Eastern Time where we discussed Argentina.
Standard & Poor's Ratings Services is pleased to announce the dates and locations for its 2015 Sovereigns and European Banks Seminar Series.
Standard & Poor’s Ratings Services held a live audio Webcast and Q&A on Wednesday, Feb. 11, 2015, at 10:00 a.m. Eastern Time, where we discussed the impact of the fall in oil prices on sovereign ratings.
Standard & Poor’s Ratings Services held an interactive, live video webcast on Wednesday, October 1, 2014, at 10 a.m. Eastern Time where we discussed Standard & Poor’s Latin American outlook for 2015.
On March 10, Germany's Ministry of Finance published draft legislation that would potentially alter the ranking of German banks' liabilities in liquidation. Specifically, the draft legislation, if enacted, would subordinate tradable senior unsecured debt instruments in insolvency relative to certain liabilities that currently rank pari passu. More
Why Standard & Poor’s Ratings Services projects little growth in Asia-Pacific sovereign borrowing this year? What accounted for these trends? Kim Eng Tan, Senior Director of Asia-Pacific Sovereign Ratings, explains. Watch
The ratings are supported by Iceland's high productivity and income levels and positive long-term growth prospects, as well as its strong institutional effectiveness. More
Many countries in Latin America are experiencing rapid domestic credit growth. In this CreditMatters TV segment, Standard & Poor’s Director Richard Francis discusses the impact this growth could have on Bolivia, Brazil, Colombia, and Paraguay. Watch
In this CreditMatters TV segment, Standard & Poor's Managing Director Roberto Sifon-Arevalo explains why the outlook on most rated Latin American sovereigns is likely to remain stable next year despite a sluggish economy and volatile market liquidity. Watch
We expect a robust macroeconomic performance from Poland this year and next. We note that the change of government following the departure of Prime Minister Tusk to a top European job unavoidably introduces some uncertainty into policymaking More
The positive outlook on the foreign currency ratings reflects our expectation that Korean economic growth will continue its strong performance relative to that of other developed market economies in the next one to two years. More
On July 29, 2014, Standard & Poor's Ratings Services affirmed its 'AAA/A-1+' unsolicited sovereign credit ratings on the Commonwealth of Australia. The outlook remains stable. The sovereign credit ratings on Australia benefit from the country's strong institutional settings, its wealthy and resilient economy, and a high degree of monetary and fiscal policy flexibility. The country's high external … More
Quantitative easing has come to Europe, and with it high hopes for long-awaited economic growth on the order of what the region enjoyed before the financial crisis. However, unless the eurozone tackles those structural issues that have dogged growth for several years now, and addresses building headwinds, those hopes may eventually be dashed. As a result, the eurozone could see renewed pressure… More
In this report, we examine the long-term benefits that Poland could reap by joining the currency union, and the likely (in our view) prerequisites for euro adoption. More
The Swiss National Bank's (SNB's) decision earlier yesterday to discontinue the exchange rate ceiling of Swiss franc 1.20 to the euro and to increase the negative interest rate on sight deposits to 0.75% has no immediate impact on its sovereign credit ratings on the Swiss Confederation. More
Muchos países en América Latina están experimentando un rápido crecimiento del crédito interno. En este segmento de CreditMatters TV, Richard Francis, Director de Standard & Poor’s analiza el impacto que dicho crecimiento podría tener sobre Bolivia, Brasil, Colombia, y Paraguay. Watch
The current political protests in Hong Kong are likely to have minimal credit implications in the short term. More
Stand-alone credit profiles (SACPs) for major corporate Korean government-related entities (GREs) have weakened significantly over the past several years. More
We raised the long-term ratings on Ecuador as a result of the government's greater fiscal flexibility, better external liquidity position, and the improving investment climate in the country. In June 2014, the government issued a $2 billion international bond, which helped diversify its funding sources as well as boost its external liquidity. More
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