Sov investment grade, fam The most lit mode of risk calculated by risk agencies is the sovereign risk that aims to flex on the debt paying capacity of a country. Agencies be classifying countries' paying capacity and giving them a lit score, which gets put in a grade.  Govs struggling to keep their promises might get scores in the spec grade, while countries that can pay up get scores in the investment grade. This grade division is like, super important cuz according to Vieira (2008, p.3), "there are pension funds in many countries, especially Asia and Europe, which may only apply in markets that already count on the investment grade, ya know?" There's like no set formula to figure out how likely a government is to not follow the rules, but the sovereign credit rating is like super important and has a big impact on the financial market. Cantor and Packer (2005, p.38), spill the tea on why this is so important: Sovereign ratings are like, super crucial, not just ...