Like the declining number of AAA-rated companies, AAA-rated countries are becoming a rare breed. The U.S. was on the ropes for quite some time, but Standard & Poor’s finally pulled the trigger, causing a media storm through the weekend. And while Warren Buffett might try to make a case for the U.S. being still worthy of AAA status, it was a matter of time before its rising debts would finally catch up.
An investor who warned of the coming downgrade was famous commodity investor Jim Rogers, who in an interview with the Wall Street Journal on July 25 claimed the U.S. already had lost its credit rating on the basis of Washington not making any "real spending cuts."
“I don’t expect them to have real spending cuts. They have been talking about this for 40 years, talking about how they are going to solve the problem of the deficit. Remember the Grace Commission? Remember the Gramm-Rudman act? The Gramm-Rudman act said we couldn’t have deficit spending 25 years ago. They forgot about that.”- Jim Rogers
So what happens next? With the markets crumbling, who is next in line to lose their AAA rating? What countries will remain with the coveted status?
Many investors believed France would be the next country in line after the European crisis deepened. French President Nicolas Sarkozy interrupted his vacation to call for a an emergency meeting with his finance officials to discuss the "economic and financial situation" of France. These fears seem to have calmed down lately as all three major rating agencies (S&P, Fitch, and Moody's) reaffirmed France's AAA status.
Countries with AAA Rating
Keep in mind that a AAA rating estimates the creditworthiness of a country, company or individual and is a measure of a country’s ability to repay debt. Thus, if a company has a lower credit rating, chances are it will pay higher interest rates due to the fact that lenders are taking on more risk and asking for a higher yield in return. Below are the major countries that continue to have AAA status. There are a few smaller countries, but they are not mentioned here.
**The smaller nations include the Isle of Man and Guernsey
An investor who warned of the coming downgrade was famous commodity investor Jim Rogers, who in an interview with the Wall Street Journal on July 25 claimed the U.S. already had lost its credit rating on the basis of Washington not making any "real spending cuts."
“I don’t expect them to have real spending cuts. They have been talking about this for 40 years, talking about how they are going to solve the problem of the deficit. Remember the Grace Commission? Remember the Gramm-Rudman act? The Gramm-Rudman act said we couldn’t have deficit spending 25 years ago. They forgot about that.”- Jim Rogers
So what happens next? With the markets crumbling, who is next in line to lose their AAA rating? What countries will remain with the coveted status?
Many investors believed France would be the next country in line after the European crisis deepened. French President Nicolas Sarkozy interrupted his vacation to call for a an emergency meeting with his finance officials to discuss the "economic and financial situation" of France. These fears seem to have calmed down lately as all three major rating agencies (S&P, Fitch, and Moody's) reaffirmed France's AAA status.
Countries with AAA Rating
Keep in mind that a AAA rating estimates the creditworthiness of a country, company or individual and is a measure of a country’s ability to repay debt. Thus, if a company has a lower credit rating, chances are it will pay higher interest rates due to the fact that lenders are taking on more risk and asking for a higher yield in return. Below are the major countries that continue to have AAA status. There are a few smaller countries, but they are not mentioned here.
- Australia
- Austria
- Canada
- Denmark
- Finland
- France
- Germany
- Hong Kong
- Liechtenstein
- Luxembourg
- Netherlands
- Norway
- Singapore
- Sweden
- Switzerland
- United Kingdom
**The smaller nations include the Isle of Man and Guernsey
