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This sort of makes no sense. The Province of Alberta (in Canada) balanced their budget, then paid off all debt in the early 2000s.

They still had the ability to issue debt (and did) because it was the belief that they were a good credit risk that was the reason behind the AAA rating.

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Province is not a country - they don't issue their own currency. Comparing Alberta's AAA to US or whatever sovereign AAA is nonsense.

Ok, but what difference does this make?

It's the difference of knowing what a dollar is worth. Imagine if the US devalued the dollar and paid off their debts immediately with some other currency. All of those bondholders would be mightily pissed. Because their bonds are worth pennies.

Provinces and smaller countries can't do this. The value of their bonds will always be compared to the dollar (unless another currency becomes the standard).

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