Sovereign Credit Ratings and the Chinese Government Credit Rating
If you're one of the Americans ostracized from the "Good Credit Club," take solace in the fact that you aren't the only one being rated. Sovereign credit ratings are credit ratings, similiar to the scores given to individuals by Equifax, Experian and Trans Union, the only difference is sovereign ratings are applied to countries. China, Sub-Saharan Africa and a host of other countries are given sovereign ratings. While they may not mean much to the layman, sovereign ratings checks the financial readiness of a country to provide an investment environment that is secure.
A country's rating is depended upon its per capita income, external debt burden, inflation experience, default history and level of economic development, these are the six factors that determine credit worthiness. Essentially is this a country that America, or anyone else, should invest in. China proved to a worthy investment pot with the recent Chinese government credit rating, but more on that later.
Corporate Credit Ratings
Moore's, Standard and Poor's (S&P) and Fitch IBCA are the three powers on world investment ratings, also called corporate ratings. Over at Fitch IBCA, a "AAA" rating signifies the highest investment grade and means that there is very low credit risk. "AA" represents very high credit quality; "A" means high credit quality, and "BBB" is good credit quality.
This means that the security or the entity being rated carries a level of quality that many institutions require when considering overseas investments. Ratings that fall under "BBB" are mandated to be junk, yep, they really have a rating called junk. The ratings are determined after diving through one record and report after another on a sovereign's ability to be a good investment.
All three of the major rating firms have online access to free reports.
The Chinese Government Credit Rating
July was a hot month in China. Standard and Poor raised the Chinese government credit rating from AA minus to AA. Kim Tang is a Chinese financial analyst, here's her take on the Chinese government credit rating upgrade.
"The reason why Hong Kong hasn't been at the double A rating has been because China has a relatively lower rating, A minus, and this constrains Hong Kong's ratings, because, at the end of the day, Hong Kong is still a territory of China, and adverse events happening in China could spill over to Hong Kong and affect its credit fundamentals adversely."
Related Credit Score and Repair Articles
Canadian Credit Checks
The important information regarding credit checks in Canada
How To Own A Credit Repair Business
Discusses how you might own a credit repair business of your own
Interested In Free Online Credit Checks
discusses how to obtain free online credit checks
Cheap flights to Johannesburg :: First Time New Mexico Home Buyers :: ACTS :: Mortgage Net Branch
