CMA, have produced a lastest report showing the credit worthiness of Countries sovereign debt. They use various measures to produce analysis of a countries likely probability of defaulting on its government debt.

Cumulative Probability of Default (CPD) quantifies the probability of a country being unable to honour its debt obligations over a given time period.

Factors which influence a Countries probability of debt default include:

• Market Credit Default Swaps CDS - This reflects how much premium investors want to hold risky bonds. It becomes a good guide to market sentiment on the riskiness of debt. (See: Credit Default Swaps explained)
• Level of Sovereign Debt as a % of GDP
• Political influences - is there the ability to cut spending e.t.c

Safest Countries for Debt Default


Source: CMA Report December 14th 2009 via Alea


The Riskiest Countries include

• Venezuala - 57% risk
• Ukraine - 54%
• Argentina - 49%
• Latvia - 30%
• Iceland - 24%

Greece is 10th riskiest

The UK is ranked 26th in the world. Its 5 year CDS rating detoriorated during the past few quarters from an index of 47 to 77. The UK has an implied credit rating of AA

Related

• List of National debt by country
• Understanding debt statistics
• Sovereign Debt Crisis Explained