Credit rating companies are distorting capital markets byassigning the same debt ranking to countries from Italy to Thailandand Kazakhstan, according to BlackRock Inc., the world's biggestmoney manager.

While 23 countries share the BBB+ to BBB- levels assessed byStandard & Poor's, the lowest investment grades, up from 15 in2008 at the beginning of the financial crisis, their debt to grossdomestic product ratios range from 12 percent for Kazakhstan to 44percent for Thailand and 126 percent for Italy, InternationalMonetary Fund estimates show. The cost of insuring against adefault by Italy, ranked BBB+, over the next five years is almosttriple that for Thailand, which has the same rating.

For BlackRock, which oversees $3.7 trillion in assets, themeasures are so untrustworthy that the firm is setting up its ownsystem to gauge the risk of investing in government bonds. Thisyear, the market moved in the opposite direction suggested bychanges to levels and outlooks 53 percent of the time, datacompiled by Bloomberg show.

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