While the United States had its credit rating downgraded to AA+ by Standard & Poor's (S&P) late last week,

Singapore has retained its higher AAA rating and is rated a safer place for investment than America. S&P says that this highest means that an "extremely strong capacity to meet financial commitments".

Not only is Singapore as a whole ranked AAA, but local institutions and companies are rated highly by S&P too. Beside Temasek Holdings is also ranked AAA, for example, as is Singapore Technologies Engineering. 

Not only that,  Bloomberg also rated Singapore banks as among the strongest in the world in June, saying that OCBC "ranks as the world's strongest bank"; DBS and UOB also placed in the top six.

While US politicians are wringing their hands in anguish, and while the risk of a global economic downturn may have increased, Singapore could gain relative benefits from the downgrade in the US rating.

Now that Singapore has a higher rating than the US, companies and individuals alike may find moving their banking to singapore to be more compelling.

Mr Matt Huang from Macquarie Group told Bloomberg, too, that after the downgrade "there really is a global need for a reallocation and rebalancing", and Singapore will be a beneficiary of that trend.

With US companies alone holding over US$1.9 trillion (S$2.3 trillion) in cash or the equivalent according to Reuters, getting even just a little piece of that pie could lift local deposits significantly.

Ratings agencies have been much maligned, in the US since S&P's latest downgrade, and more widely before that when downgrades came late in the game during the 2008 global financial crisis. Yet some investors still do use them for their investment decision

And Investors may aloo use them to compare the risks of various issuers and securities, just as banks often use credit scores to assess the risk of an individual borrower. A rating is only one of many metrics investors use when analysing bonds, but it is an important one".

With the latest developments, Mr Peter Cohan explains on Forbes that "some public pension funds and mutual funds may be required to sell US Treasuries" since these funds can only hold AAA securities; he estimates that sales could amount to 3 per cent of their US Treasury holdings. Foreign investors may similarly reassess whether they want to invest in now-lower-rated US Treasuries.

Looking at this, some organisations will now be looking for another place to park their money. Singapore's AAA rating means it could be one of the destinations for investors' funds.

Of course, investors could also consider putting their money in other countries with an AAA rating. Switzerland or Australia are some other choices.

As Singapore are more proactively in the Middle East, Europe or the Americas, and whether companies are looking at building a factory or simply placing excess funds, this could help increase investors' comfort with Singapore as an attractive destination.