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Credit ratings: how Fitch, Moody’s and S&P rate each country

Sovereign credit ratings View larger picture
Credit ratings: how Fitch, Moody’s and S&P rate each country. Click image for graphic

Italy have had their A+ rating cut a level reducing their Standard and Poor’s (S&P) sovereign rating to A.

The decision has angered Italian prime minister Silvio Berlusconi. Alex Hawkes writes:

Italian prime minister Silvio Berlusconi swiftly attacked S&P, claiming the ratings agency’s action was "dictated more by newspaper stories than by reality".

S&P cut Italy’s government debt rating to A/A-1 from A+/A-1+ and said Italy’s economic growth prospects were getting weaker, with planned reforms by the government not expected to help much.

The credit rating agency have kept the outlook for Italy as negative.

Last month America lost its prestigious AAA rating when S&Pdowngraded it to AA+, despite a deal being drawn to raise the US debt ceiling.

S&P warned back in July that the US faced a 50-50 chance of having their credit rating cut within the next three months. Shortly after the agency put the US on a negative watch, the value of the dollar fell.

Moody’s have re-assessed the credit ratings of several countries this year. Ireland had their credit rating slashed earlier this year , down two notches to Baa3 – leaving it at just above junk status, with the verdict being delivered as the Euro dropped against the dollar. Portugal and Greece also saw their credit ratings being slashed by the agency.

Portugal had their credit rating slashed at the beginning of the year from A1 to A3 after Moody’s stated concerns over the country’s subdued growth for the next few years and Greece had their ratings re-assessed which brought their rating down to B1 amidst furious opposition from the Greek government.

So, who are the ratings agencies? The big three agencies are Fitch, Moody’s and Standard & Poors. What they do is assess how likely a borrower is to be able to repay its debts and help those trading debt contracts in the secondary market.

That means for those trading debt contracts such as treasury gilts after they’ve been issued, ratings agencies help assess a fair price to charge. Ratings agencies have been criticised for having too much clout in jittery markets during the financial crisis. They were widely attacked for failing to warn of the risks posed by certain securities, in particular mortgage-backed securities.

Losing your rating or being downgraded can have a fatal effect on your country’s ability to borrow money on the markets.

Thanks to the three big agencies, we can bring you the ratings of countries around the world as of today. Because each agency’s approach is slightly different, we’ve colour-coded them in three broad categories too.

Can you do something with the data?
Data summary
Credit ratings by agency and country – Updated Sept 2011

Click heading to sort – Download this data as pdf format

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