Sovereign Credit Rating

A sovereign credit rating is an independent assessment of a country’s creditworthiness, issued by rating agencies such as Standard & Poor’s, Moody’s, and Fitch. It reflects the likelihood that a country will default on its debt obligations. Higher sovereign ratings indicate a lower risk of default and suggest a stable economic environment, while lower ratings suggest higher risk and potential difficulties in meeting debt repayments.

Example

The U.S. maintains a high sovereign credit rating, indicating that it is considered highly likely to meet its debt obligations, making its bonds a safe investment.