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Government Debt Issuers Most Likely to Default

Photo: CNBC.com | Source: CMA DataVision

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Gov't Debt Issuers In Trouble

With the recent news surrounding the troubled economies of Greece and Dubai, many have questioned the stability and safety of government debt issued by these countries.

But whose debt is really in the worst shape?

To answer this question CMA DataVision, a subsidiary of the CME Group, has put together its "Sovereign Risk Monitor", which ranks the world’s most volatile sovereign debt issuers according to percent changes in five-year credit default swaps (CDS).

The countries are ranked by their cumulative probability of default (CPD), which gives the market's assessment of an issuer's likelihood of default over the life of a CDS contract. So, if a country has a 20% CPD rating for its five-year CDS contracts, the market believes this debt has a two-in-ten chance of defaulting in the next five years.

Also included for each country is their most recent credit rating from one of the major agencies that covers them.

So, what current government debt carries the highest risk of default? Click ahead to find out!

By Paul Toscano
Updated 1 March 2010

Photo: CNBC.com | Source: CMA DataVision