Standard and Poors isn't above making political statements with their bond ratings. For instance, their move to drop the US government out of AAA status in 2011 in the midst of a debt-ceiling showdown. Here's my take at the time.
While there is a non-trivial chance that the US might default somewhere down the line, the timing might be more a policy hissy-fit from S&P than a coherent assessment of American default chances. ... Investors are giving Uncle Sam a 0.01% interest rate yesterday; there isn't a lot of room to slide any default risk premium into that yield.
However, they may well be right in their call to move Russian sovereign debt to BB+, the top tier of non-investment-grade (a.k.a junk) status, as much as Pooty-poot doesn't like it-
Moscow on Tuesday slammed Standard and Poor's for downgrading Russia's credit rating to "junk", saying the move was motivated by the West's current standoff with Russia over Ukraine.
A Russian deputy foreign minister, Vasily Nebenzya, even claimed the S&P downgrade to BB+ was "ordered from Washington (in a) new wave of anti-Russian hysteria", while Prime Minister Dmitry Medvedev called ratings a "purely political instrument".
I sense a bit of projection in that; they would likely have the power (and the willingness to use it, as the Alexander Litvinenko story reminds us) to tell their folks to downgrade foreigner's debt if it was politically expedient, so they assume everyone else has that power.
However, the markets are making themselves heard. Russian 10-year bonds are yielding 14%. The Greeks, looking a possible default in the face after the Syriza government took over this week, are a bit over 9% per Bloomberg.
Unless there's some inflation premium at play with the Borscht Bonds, the bond markets are calling BS. There is a certain amount of room for government manipulation of bond and foreign exchange markets (the "dirty float" as its called), but the markets will generally win
There would seem to be a significant chance that Putin and company would be willing to turn their back on world financial markets if their current cash flow crisis, caused by both low oil prices and trade sanctions from their adventures in Ukraine, comes to a head. That would be consistent with the Orthodox Russia against the heathen world meme that Putin is running.
The markets are reflecting that, unlike the AA+ call of four years ago, where the markets kept giving the US the "risk-free rate" rounding to zero on T-Bills despite S&P's misgivings.