Book excerpt: "This paper provides a detailed technical description of a methodology designed to assign internal credit ratings to sovereigns using only publicly available data. Our sovereign rating methodology relies on fundamental credit analysis that produces a forward-looking and "through-the-cycle" assessment of a sovereign's capacity and willingness to pay its financial obligations, resulting in an opinion on the relative credit standing or likelihood of default. The paper focuses on the components of the methodology that are new to the science of credit risk assessment for sovereigns, and includes components that have been borrowed from the existing literature. The authors intend for this paper to support efforts by reserve managers and other investors to go beyond mechanistic reliance on credit rating agency (CRA) ratings and instead establish or strengthen internal credit assessment practices. The methodology presented can be used by credit risk practitioners to assess the relative credit quality of a sovereign. Moreover, this framework is flexible enough to accommodate modifications that cater to specific needs"--Introd., p. 2.