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BB-rated credit yield spread = 7% – 4% = 3%
This means there is 3% more risk on U.S. corporate bonds than risk-free.
Country risk premium = (14% – 4%) – 3% = 7%
So, it seems they are suggesting that country risk for the foreign country is the difference between the two risk-free rates, minus the additonal risk that U.S. corporate bonds have over the risk-free rate. I don’t think U.S. corporate bonds should have anything to do with this.