While the United States was said to enjoy the best credit in the world, that was less a factor of its AAA rating and more a matter of a massive economy and unsurpassed resources.
In fact, a full 14% of the 123 sovereign states that Standard & Poor’s monitors — most of them in Europe and all in what we might call the “developed world” — have AAA ratings.
They range from tiny Liechtenstein and the semi-autonomous islands of Guernsey and Man to the industrial powerhouses of Western Europe.
A full list includes Australia, Singapore and Hong Kong on the Pacific Rim. Canada is now alone in the Western Hemisphere.
Every country in Scandinavia with the exception of Iceland is in the club, including Denmark, Norway and Sweden — none of which have joined the euro zone.
Luxembourg, France, Germany, the Netherlands and Austria account for the AAA euro group.
Outside the euro, the United Kingdom, Liechtenstein and Switzerland — which currently boasts the lowest bond yields in the world — round out the list.
In the S&P AA+ club are New Zealand, Belgium, and now the United States.
As to whether the difference between AAA and AA+ translates into higher bond yields, the answer is “sometimes.”
Despite its AAA rating, Australia, for example, pays a full 1.5 percentage points more interest on its two-year debt than Belgium.
And within the AAA group, 10-year yields range from a low of 1.224% for Swiss debt to a high of 4.655%, again for Australia.
Whether the United States retains its safe haven status after the downgrade remains to be seen.
In fact, out of the G-7 group of the most powerful economies in the developed world, only four — the United Kingdom, France, Canada and Germany — now have an AAA according to the rating agency.