Standard & Poor’s has expanded its list of entities whose debt is rated higher than the sovereign debt of the country in which they are based.
One hundred seven corporate (including financial institution) and local or regional government (LRG) ratings exceed the rating on the sovereign in the country of domicile, on a foreign-currency basis. These entities include a handful of structured counterparties and are domiciled in 21 different countries. The list does not include state and municipal obligors in the U.S. with ratings above the sovereign.
US companies on the list include Automatic Data Processing (ADP), ExxonMobil (XON), Johnson & Johnson (JNJ) and Microsoft (MSFT).
The list has grown since Standard & Poor’s Ratings Services expanded its criteria for assessing the risk of the sovereign restricting access to foreign exchange needed for debt service.
The operating and financial characteristics of the entities listed in the table have been tested against severe downside scenarios. Their higher ratings indicate that Standard & Poor’s believes there is a measurable likelihood that these entities can meet debt obligations even when the sovereign cannot.
For details, see Corporate And Government Ratings That Exceed The Sovereign Rating
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