Venezuela, Lebanon Lead Way With Worst Credit Ratings

Countries such as Australia and Canada enjoy perfect AAA credit ratings, but which countries sit at the opposite end of the table?

Which countries are the worst of the worst, according to credit rating agency Moody's?

The lowest rating that Moody's gives out for sovereign debt is "C", which two countries can lay claim to having as of this moment.

A rating of "C" means that a country is currently in default and anybody who owns their debt is likely out of luck.

Venezuela, which has been in default since 2017, owes tens of billions of dollars in unpaid bond payments. The country has an assortment of economic issues that they are trying to deal with, and the prospects for them emerging from the abyss anytime soon are slim.

The second country that currently sports a "C" credit rating from Moody's? Lebanon, which defaulted on their bonds in 2020. Lebanon is dealing with a number of different issues and hasn't had any progress on a restructuring of their debt.

There are six countries who currently have "Ca" ratings from Moody's, which means that they have "significant" default risk. They are:

Zambia
Ethiopia
Sri Lanka
Ghana
Belarus
Ukraine

Four of these countries have defaulted on their debt in recent years, while the other two are constantly on the brink of default.

The next level up is "Caa3", which means that a country has some default risk but less than the "C" or "Ca" levels:

Argentina
Tunisia

Both of these countries are struggling. Tunisia is at risk for being downgraded, as they are currently listed as "negative" at Moody's (meaning they can be downgraded at any time), while Argentina is working to improve its credit rating and is currently listed as "stable".

Of the countries on this list, Ethiopia and Tunisia are both at risk for downgrades.

Filed under: General Knowledge