Credit Rating Agency strips US, UK of AAA status
Yes, you read that right. The Caveat is that the credit rating agency is very new and that it is based in China. Via Dagong Credit:
As a non-western rating agency, this is not only the first one in China, but also the first one in the world, that releases information on sovereign credit risks.
The on-going financial crisis which originated from the U.S. and the latest Greek debt crisis, have fully reviewed the shortcomings and defects of existing sovereign credit rating agencies. In this context, the international community has reached consensus to reform the existing international credit rating system. Chinese President Hu Jintao has lately stressed at the fourth G20 summit in Toronto that : "we must develop an objective, fair, reasonable and uniformed method and standard for sovereign credit rating, so that the rating result can precisely reflect a country's economic situation as well as its level of credit risk."
In this background, Dagong has recently assigned sovereign ratings for 50 countries for the first time, the geographic locations of which are in different continents around the world. Among them ,20 countries in Europe, 17 countries in Asia, 2 in North America, 6 in South America, 3 in African and 2 in Oceania. The total GDP of these 50 countries accounted for 90% of that of the whole world. China is assigned AA+ for RMB-denominated debt and AAA for foreign currency debt. The United States is assigned AA for US-dollar-denominated debt and AA for foreign currency debt, Germany is assigned AA+ for local currency debt and AA+ for foreign currency debt, Japan is assigned AA- for local currency debt and AA for foreign currency debt. In terms of overall credit level, investment grade of local currency credit rating accounts for 72%(BBB- and above), and speculative grade (BB+ and below) accounts for 28%; investment grade of foreign currency credit rating accounts for 74%, and speculative grade accounts for 26%. On the respect of consistency of the foreign currency rating and local currency rating, there are 38 countries getting the same ratings, and 3 countries have higher foreign currency rating than local currency rating, 9 countries have higher local currency ratings. It reveals nearly all the characteristics of typical regional credit risk, the distribution of credit risk around the world as well as their changing trend.