Analytics, Financial Services, Investments, Latvia, Lithuania

Switzerland and Japan have been knocked out of the ranks of the world's 10 safest issuers of sovereign bonds by Australia and New Zealand, whose economies are benefiting from rising commodity prices and consumer demand, writes Bloomberg/LETA.

The perceived risk of Switzerland defaulting on its debt has raised 8 basis points this month, following a 26 basis point drop last quarter that lagged behind its rivals. The performance indicates it's a more risky investment than Belgium, Norway, France, Germany and the Netherlands, according to credit-default swap prices from Credit Market Analysis.

Those nations, with Finland, the U.S., Denmark and now Australia and New Zealand, have the least probability of default among 63 governments with credit swap contracts on their debt, London-based CMA said in a report.

Credit-default swap indexes are benchmarks for protecting bonds against default and traders use them to speculate on credit quality. An increase suggests deteriorating perceptions of credit quality, and a drop shows improvement.

Countries with the highest perceived default risk include the Ukraine, Argentina, Venezuela, Latvia, Iceland, Lithuania, Kazakhstan, Lebanon and Russia, the CMA report shows. Lebanon and Russia replaced Romania and Bulgaria after their standing improved thanks to International Monetary Fund intervention. Bulgaria was Eastern Europe's best performer last quarter after its credit-default swaps rose 49%, the report said.

Credit-default swaps pay a buyer face value in exchange for the underlying securities or the cash equivalent should a borrower fail to adhere to its debt agreements. A basis point on a contract protecting $10 million of debt from default for five years is equivalent to $1,000 a year.