Country LongTermRating Adj.

DefaultSpread TotalRiskPremium
Albania B1 650 14.75%
Argentina B3 900 18.50%
Armenia Ba2 400 11.00%
Australia Aaa 0 5.00%
Austria[1] Aaa 0 5.00%
Azerbaijan Ba1 300 9.50%
Bahamas A1 140 7.10%
Bahrain A2 160 7.40%
Barbados A3 175 7.63%
Belarus B1 650 14.75%
Belgium[1] Aa1 70 6.05%
Belize Caa1 1200 23.00%
Bermuda Aaa 0 5.00%
Bolivia B3 900 18.50%
BosniaandHerzegovina B2 750 16.25%
Botswana A1 140 7.10%
Brazil Ba1 300 9.50%
Bulgaria Baa3 260 8.90%
Cambodia B2 750 16.25%
Canada Aaa 0 5.00%
CaymanIslands Aa3 120 6.80%
Chile A1 140 7.10%
China A1 140 7.10%
Colombia Baa3 260 8.90%
CostaRica Ba1 300 9.50%
Croatia Baa2 225 8.38%
Cuba Caa1 1200 23.00%
Cyprus[1] Aa3 120 6.80%
CzechRepublic A1 140 7.10%
Denmark Aaa 0 5.00%
DominicanRepublic B2 750 16.25%
Ecuador Ca 260 8.90%
Egypt Ba1 300 9.50%
ElSalvador Baa2 225 8.38%
Estonia A1 140 7.10%
FijiIslands Ba2 400 11.00%
Finland[1] Aaa 0 5.00%
France[1] Aaa 0 5.00%
Germany[1] Aaa 0 5.00%
Greece[1] A1 140 7.10%
Guatemala Ba1 300 9.50%
Honduras B2 750 16.25%
HongKong Aa2 100 6.50%
Hungary A3 175 7.63%
Iceland Baa1 200 8.00%
India Ba2 400 11.00%
Indonesia Ba3 525 12.88%
Ireland[1] Aaa 0 5.00%
IsleofMan Aaa 0 5.00%
Israel A1 140 7.10%
Italy[1] Aa2 100 6.50%
Jamaica Ba2 400 11.00%
Japan Aa3 120 6.80%
Jordan Baa3 260 8.90%
Kazakhstan Baa1 200 8.00%
Korea A2 160 7.40%
Kuwait Aa2 100 6.50%
Latvia A3 175 7.63%
Lebanon B3 900 18.50%
Lithuania A2 160 7.40%
Luxembourg[1] Aaa 0 5.00%
Macao Aa3 120 6.80%
Malaysia A3 175 7.63%
Malta[1] A1 140 7.10%
Mauritius Baa2 225 8.38%
Mexico Baa1 200 8.00%
Moldova Caa1 1200 23.00%
Mongolia B1 650 14.75%
Montenegro Ba2 400 11.00%
Morocco Ba1 300 9.50%
Netherlands[1] Aaa 0 5.00%
NewZealand Aaa 0 5.00%
Nicaragua B3 900 18.50%
Norway Aaa 0 5.00%
Oman A2 160 7.40%
Pakistan B3 900 18.50%
Panama Ba1 300 9.50%
PapuaNewGuinea B1 650 14.75%
Paraguay B3 900 18.50%
Peru Baa3 260 8.90%
Philippines B1 650 14.75%
Poland A2 160 7.40%
Portugal[1] Aa2 100 6.50%
Qatar Aa2 100 6.50%
Romania Baa3 260 8.90%
Russia Baa1 200 8.00%
SaudiArabia A1 140 7.10%
Singapore Aaa 0 5.00%
Slovakia A1 140 7.10%
Slovenia[1] Aa2 100 6.50%
SouthAfrica A2 160 7.40%
Spain[1] Aaa 0 5.00%
St.Vincent&theGrenadin B1 650 14.75%
Suriname Ba3 525 12.88%
Sweden Aaa 0 5.00%
Switzerland Aaa 0 5.00%
Taiwan Aa3 120 6.80%
Thailand Baa1 200 8.00%
TrinidadandTobago Baa1 200 8.00%
Tunisia Baa2 225 8.38%
Turkey Ba3 525 12.88%
Turkmenistan B2 750 16.25%
Ukraine B1 650 14.75%
UnitedArabEmirates Aa2 100 6.50%
UnitedKingdom Aaa 0 5.00%
UnitedStatesofAmerica Aaa 0 5.00%
Uruguay B1 650 14.75%
Venezuela B1 650 14.75%
Vietnam Ba3 525 12.88%
CountryRiskPremium Region
9.75% Eastern Europe & Russia
13.50% Central and South America
6.00% Eastern Europe & Russia
0.00% Australia & New Zealand
0.00% Western Europe
4.50% Eastern Europe & Russia
2.10% Caribbean
2.40% Middle East
2.63% Caribbean
9.75% Eastern Europe & Russia
1.05% Western Europe
18.00% Central and South America
0.00% Caribbean
13.50% Central and South America
11.25% Eastern Europe & Russia
2.10% Africa
4.50% Central and South America
3.90% Eastern Europe & Russia
11.25% Asia
0.00% North America
1.80% Caribbean
2.10% Central and South America
2.10% Asia
3.90% Central and South America
4.50% Central and South America
3.38% Eastern Europe & Russia
18.00% Caribbean
1.80% Western Europe
2.10% Eastern Europe & Russia
0.00% Western Europe
11.25% Caribbean
3.90% Central and South America
4.50% Africa
3.38% Central and South America
2.10% Eastern Europe & Russia
6.00% Asia
0.00% Western Europe
0.00% Western Europe
0.00% Western Europe
2.10% Western Europe
4.50% Central and South America
11.25% Central and South America
1.50% Asia
2.63% Eastern Europe & Russia
3.00% Western Europe
 6.00% Asia
7.88% Asia
0.00% Western Europe
0.00% Financial Center
2.10% Middle East
1.50% Western Europe
6.00% Caribbean
1.80% Asia
3.90% Middle East
3.00% Eastern Europe & Russia
2.40% Asia
1.50% Middle East
2.63% Eastern Europe & Russia
13.50% Middle East
2.40% Eastern Europe & Russia
0.00% Financial Center
1.80% Asia
2.63% Asia
2.10% Western Europe
3.38% Africa
3.00% North America
18.00% Eastern Europe & Russia
9.75% Asia
6.00% Eastern Europe & Russia
4.50% Africa
0.00% Western Europe
0.00% Australia & New Zealand
13.50% Central and South America
0.00% Western Europe
2.40% Middle East
13.50% Asia
4.50% Central and South America
9.75% Asia
13.50% Central and South America
3.90% Central and South America
9.75% Asia
2.40% Eastern Europe & Russia
1.50% Western Europe
1.50% Middle East
3.90% Eastern Europe & Russia
3.00% Eastern Europe & Russia
2.10% Middle East
0.00% Asia
2.10% Eastern Europe & Russia
1.50% Eastern Europe & Russia
2.40% Africa
 0.00% Western Europe
9.75% Caribbean
7.88% Caribbean
0.00% Western Europe
0.00% Western Europe
1.80% Asia
3.00% Asia
3.00% Caribbean
3.38% Africa
7.88% Asia
11.25% Eastern Europe & Russia
9.75% Eastern Europe & Russia
1.50% Middle East
0.00% Western Europe
0.00% North America
9.75% Central and South America
9.75% Central and South America
7.88% Asia
 EstimatingCountryRiskPremiums
Toestimatethelongtermcountryriskpremium,Istartwiththecountryrating(fromMoody's:www.moodys.com)andestimatethedefaultspreadfor
thatrating(UScorporatesandcountrybonds)overthetreasurybondrate.Thisbecomesameasureoftheaddedcountryriskpremiumforthatcountry.
Iaddthisdefaultspreadtothehistoricalriskpremiumforamatureequitymarket(estimatedfromUShistoricaldata)toestimatethetotalriskpremium.
Intheshorttermespecially,theequitycountryriskpremiumislikelytobegreaterthanthecountry'sdefaultspread.Youcanestimateanadjustedcountryrisk
premiumbymultiplyingthedefaultspreadbytherelativeequitymarketvolatilityforthatmarket(Stddevincountryequitymarket/Stddevincountrybond)
Inthisspreadsheet,Ihaveusedtheglobalaverageofequitytobondmarketvolatilityof1.5toestimatethecountryequityriskpremium.

Enter the current risk premium for a mature equity market

The US corporate spreads come from a deeper market, but the country bond spreads may be a more direct measure of country risk. To update the spreads
go to the bottom of the spreadsheet.
Do you want to adjust the country risk premium for the additional volatility of the equity market?
If no, use the country risk premium from the columns below
If yes, you can adjust the country risk premium for the relative volatility of the equity market below:
Enter the country risk premium from default spread =
Enter the standard deviation in the equity market in the country =
Enter the standard deviation in the long term bond issued by the country =
The adjusted country risk premium for your country is =

Country Region LongTermRating Adj.DefaultSpread

Albania Eastern Europe & Russia B1 650
Argentina Central and South America B3 900
Armenia Eastern Europe & Russia Ba2 400
Australia Australia & New Zealand Aaa 0
Austria[1] WesternEurope Aaa 0
Azerbaijan EasternEurope&Russia Ba1 300
Bahamas Caribbean A1 140
Bahrain MiddleEast A2 160
Barbados Caribbean A3 175
Belarus EasternEurope&Russia B1 650
Belgium[1] WesternEurope Aa1 70
Belize CentralandSouthAmerica Caa1 1200
Bermuda Caribbean Aaa 0
Bolivia CentralandSouthAmerica B3 900
BosniaandHerzegovina EasternEurope&Russia B2 750
Botswana Africa A1 140
Brazil CentralandSouthAmerica Ba1 300
Bulgaria EasternEurope&Russia Baa3 260
Cambodia Asia B2 750
Canada NorthAmerica Aaa 0
CaymanIslands Caribbean Aa3 120
Chile CentralandSouthAmerica A1 140
China Asia A1 140
Colombia CentralandSouthAmerica Baa3 260
CostaRica CentralandSouthAmerica Ba1 300
Croatia EasternEurope&Russia Baa2 225
Cuba Caribbean Caa1 1200
Cyprus[1] WesternEurope Aa3 120
CzechRepublic EasternEurope&Russia A1 140
Denmark WesternEurope Aaa 0
DominicanRepublic Caribbean B2 750
Ecuador CentralandSouthAmerica Ca 260
Egypt Africa Ba1 300
ElSalvador CentralandSouthAmerica Baa2 225
Estonia EasternEurope&Russia A1 140
FijiIslands Asia Ba2 400
Finland[1] WesternEurope Aaa 0
France[1] WesternEurope Aaa 0
Germany[1] WesternEurope Aaa 0
Greece[1] WesternEurope A1 140
Guatemala CentralandSouthAmerica Ba1 300
Honduras CentralandSouthAmerica B2 750
HongKong Asia Aa2 100
Hungary EasternEurope&Russia A3 175
Iceland WesternEurope Baa1 200
India Asia Ba2 400
Indonesia Asia Ba3 525
Ireland[1] WesternEurope Aaa 0
IsleofMan FinancialCenter Aaa 0
Israel MiddleEast A1 140
Italy[1] WesternEurope Aa2 100
Jamaica Caribbean Ba2 400
Japan Asia Aa3 120
Jordan MiddleEast Baa3 260
Kazakhstan EasternEurope&Russia Baa1 200
Korea Asia A2 160
Kuwait MiddleEast Aa2 100
Latvia EasternEurope&Russia A3 175
Lebanon MiddleEast B3 900
Lithuania EasternEurope&Russia A2 160
Luxembourg[1] FinancialCenter Aaa 0
Macao Asia Aa3 120
Malaysia Asia A3 175
Malta[1] WesternEurope A1 140
Mauritius Africa Baa2 225
Mexico CentralandSouthAmerica Baa1 200
Moldova EasternEurope&Russia Caa1 1200
Mongolia Asia B1 650
Montenegro EasternEurope&Russia Ba2 400
Morocco Africa Ba1 300
Netherlands[1] WesternEurope Aaa 0
NewZealand Australia&NewZealand Aaa 0
Nicaragua CentralandSouthAmerica B3 900
Norway WesternEurope Aaa 0
Oman MiddleEast A2 160
Pakistan Asia B3 900
Panama CentralandSouthAmerica Ba1 300
PapuaNewGuinea Asia B1 650
Paraguay CentralandSouthAmerica B3 900
Peru CentralandSouthAmerica Baa3 260
Philippines Asia B1 650
Poland EasternEurope&Russia A2 160
Portugal[1] WesternEurope Aa2 100
Qatar MiddleEast Aa2 100
Romania EasternEurope&Russia Baa3 260
Russia EasternEurope&Russia Baa1 200
SaudiArabia MiddleEast A1 140
Singapore Asia Aaa 0
Slovakia EasternEurope&Russia A1 140
Slovenia[1] EasternEurope&Russia Aa2 100
SouthAfrica Africa A2 160
Spain[1] WesternEurope Aaa 0
St.Vincent&theGrenadines Caribbean B1 650
Suriname Caribbean Ba3 525
Sweden WesternEurope Aaa 0
Switzerland WesternEurope Aaa 0
Taiwan Asia Aa3 120
Thailand Asia Baa1 200
TrinidadandTobago Caribbean Baa1 200
Tunisia Africa Baa2 225
Turkey Asia Ba3 525
Turkmenistan EasternEurope&Russia B2 750
Ukraine EasternEurope&Russia B1 650
UnitedArabEmirates MiddleEast Aa2 100
UnitedKingdom WesternEurope Aaa 0
UnitedStatesofAmerica NorthAmerica Aaa 0
Uruguay CentralandSouthAmerica B1 650
Venezuela CentralandSouthAmerica B1 650
Vietnam Asia Ba3 525
Rating Default spread in basis points
Aaa 0
Aa1 70
Aa2 100
Aa3 120
A1 140
A2 160
A3 175
Baa1 200
Baa2 225
Baa3 260
Ba1 300
Ba2 400
Ba3 525
B1 650
B2 750
B3 900
Caa1 1200
Caa2 1350
Caa3 1500
Premiums

5.00% ! I use the risk premium for the United States for this estimate
The historical spreads represent an average over 5 years
sk. To update the spreads

Yes ! Yes or No

5.50%
61% ! Use annualized historical volatility
35% ! Use annualized historical volatility
9.59%

TotalRiskPremium CountryRiskPremium Has to be sorted in ascending order

14.75% 9.75% Rating Default spread in basis points
18.50% 13.50% A1 140
11.00% 6.00% A2 160
5.00% 0.00% A3 175
5.00% 0.00% Aa1 70
9.50% 4.50% Aa2 100
7.10% 2.10% Aa3 120
7.40% 2.40% Aaa 0
7.63% 2.63% B1 650
14.75% 9.75% B2 750
6.05% 1.05% B3 900
23.00% 18.00% Ba1 300
5.00% 0.00% Ba2 400
18.50% 13.50% Ba3 525
16.25% 11.25% Baa1 200
7.10% 2.10% Baa2 225
9.50% 4.50% Baa3 260
8.90% 3.90% Caa1 1200
16.25% 11.25% Caa2 1350
5.00% 0.00% Caa3 1500
6.80% 1.80%
7.10% 2.10%
7.10% 2.10%
8.90% 3.90%
9.50% 4.50%
8.38% 3.38%
23.00% 18.00%
6.80% 1.80%
7.10% 2.10%
5.00% 0.00%
16.25% 11.25%
8.90% 3.90%
9.50% 4.50%
8.38% 3.38%
7.10% 2.10%
11.00% 6.00%
5.00% 0.00%
5.00% 0.00%
5.00% 0.00%
7.10% 2.10%
9.50% 4.50%
16.25% 11.25%
6.50% 1.50%
7.63% 2.63%
8.00% 3.00%
11.00% 6.00%
12.88% 7.88%
5.00% 0.00%
5.00% 0.00%
7.10% 2.10%
6.50% 1.50%
11.00% 6.00%
6.80% 1.80%
8.90% 3.90%
8.00% 3.00%
7.40% 2.40%
6.50% 1.50%
7.63% 2.63%
18.50% 13.50%
7.40% 2.40%
5.00% 0.00%
6.80% 1.80%
7.63% 2.63%
7.10% 2.10%
8.38% 3.38%
8.00% 3.00%
23.00% 18.00%
14.75% 9.75%
11.00% 6.00%
9.50% 4.50%
5.00% 0.00%
5.00% 0.00%
18.50% 13.50%
5.00% 0.00%
7.40% 2.40%
18.50% 13.50%
9.50% 4.50%
14.75% 9.75%
18.50% 13.50%
 8.90% 3.90%
14.75% 9.75%
7.40% 2.40%
6.50% 1.50%
6.50% 1.50%
8.90% 3.90%
8.00% 3.00%
7.10% 2.10%
5.00% 0.00%
7.10% 2.10%
6.50% 1.50%
7.40% 2.40%
5.00% 0.00%
14.75% 9.75%
12.88% 7.88%
5.00% 0.00%
5.00% 0.00%
6.80% 1.80%
8.00% 3.00%
8.00% 3.00%
8.38% 3.38%
12.88% 7.88%
16.25% 11.25%
14.75% 9.75%
6.50% 1.50%
5.00% 0.00%
5.00% 0.00%
14.75% 9.75%
14.75% 9.75%
12.88% 7.88%
 Foreign CurrencLocal Currency
Albania B1 B1
Argentina B3 B3
Armenia Ba2 Ba2 Local-Currency Government Bond Ratings reflect the governments c
Australia Aaa Aaa Foreign-Currency Government Bond Ratings reflect the governments
Austria [1] Aaa Aaa
Azerbaijan Ba1 Ba1
Bahamas A3 A1
Bahrain A2 A2
Barbados Baa2 A3
Belarus B1 B1
Belgium [1] Aa1 Aa1
Belize Caa1 Caa1
Bermuda Aa1 Aaa
Bolivia B3 B3
Bosnia and Herzeg B2 B2
Botswana A2 A1
Brazil Ba1 Ba1
Bulgaria Baa3 Baa3
Cambodia B2 B2
Canada Aaa Aaa
Cayman Islands Aa3 Aa3
Chile A2 A1
China A1 A1
Colombia Ba1 Baa3
Costa Rica Ba1 Ba1
Croatia Baa3 Baa2
Cuba Caa1 Caa1
Cyprus [1] Aa3 Aa3
Czech Republic A1 A1
Denmark Aaa Aaa
Dominican Republi B2 B2
Ecuador Ca Ca
Egypt Ba1 Ba1
El Salvador Baa3 Baa2
Estonia A1 A1
Fiji Islands Ba2 Ba2
Finland [1] Aaa Aaa
France [1] Aaa Aaa
Germany [1] Aaa Aaa
Greece [1] A1 A1
Guatemala Ba2 Ba1
Honduras B2 B2
Hong Kong Aa2 Aa2
Hungary A3 A3
Iceland Baa1 Baa1
India Baa3 Ba2
Indonesia Ba3 Ba3
Ireland [1] Aaa Aaa
Isle of Man Aaa Aaa
Israel A1 A1
Italy [1] Aa2 Aa2
Jamaica B1 Ba2
Japan Aaa Aa3
Jordan Ba2 Baa3
Kazakhstan Baa2 Baa1
Korea A2 A2
Kuwait Aa2 Aa2
Latvia A3 A3
Lebanon B3 B3
Lithuania A2 A2
Luxembourg [1] Aaa Aaa
Macao Aa3 Aa3
Malaysia A3 A3
Malta [1] A1 A1
Mauritius Baa2 Baa2
Mexico Baa1 Baa1
Moldova Caa1 Caa1
Mongolia B1 B1
Montenegro Ba2 Ba2
Morocco Ba1 Ba1
Netherlands [1] Aaa Aaa
New Zealand Aaa Aaa
Nicaragua Caa1 B3
Norway Aaa Aaa
Oman A2 A2
Pakistan B3 B3
Panama Ba1 Ba1
Papua New Guinea B1 B1
Paraguay B3 B3
Peru Ba1 Baa3
Philippines B1 B1
Poland A2 A2
Portugal [1] Aa2 Aa2
Qatar Aa2 Aa2
Romania Baa3 Baa3
Russia Baa1 Baa1
Saudi Arabia A1 A1
Singapore Aaa Aaa
Slovakia A1 A1
Slovenia [1] Aa2 Aa2
South Africa Baa1 A2
Spain [1] Aaa Aaa
St. Vincent & the B1 B1
Suriname B1 Ba3
Sweden Aaa Aaa
Switzerland Aaa Aaa
Taiwan Aa3 Aa3
Thailand Baa1 Baa1
Trinidad and Tobag Baa1 Baa1
Tunisia Baa2 Baa2
Turkey Ba3 Ba3
Turkmenistan B2 B2
Ukraine B1 B1
United Arab Emirat Aa2 Aa2
United Kingdom Aaa Aaa
United States of A Aaa Aaa
Uruguay B1 B1
Venezuela B2 B1
Vietnam Ba3 Ba3
 GOVERNMENT BOND RATINGS
IN LOCAL AND FOREIGN CURRENCY
rnment Bond Ratings reflect the governments capacity and willingness to generate local-currency revenue to repay its local-currency bonds on a timely basis.
vernment Bond Ratings reflect the governments capacity and willingness to mobilize foreign exchange to repay its foreign-currency denominated bonds on a timely basis.
 s on a timely basis.
minated bonds on a timely basis.