Category Archives: Credit Ratings

Credit Ratings

Alberta’s credit rating has been under pressure since before the NDP were elected in May 2015. While rating actions did not occur until later in 2015, provincial finances had been deteriorating since the financial crisis in 2007-08. Although oil prices recovered after the financial crisis, rising capital and operating expenditures, combined with a huge drop in royalty revenue, have considerably weakened the province’s financial flexibility.

In the most recent report, Moodys downgraded the province from Aaa to Aa1 because of ” the province’s growing and unconstrained debt burden, extended timeframe back to balance, weakened liquidity, and risks surrounding the success of the province’s medium-term fiscal plan given the outlook for subdued growth.”  The report came just four days after the provincial budget was tabled. Moody’s also expressed concerns about Alberta’s biggest financial agency, Alberta Treasury Branches.  The agency noted: “the provincial guarantee of ATB Financial’s obligations may pose additional stress on the province’s level of cash and investments. ATB’s gross impaired loans doubled year-over-year to 1.1% of total loans at December 2015, reflecting some deterioration in ATB’s exploration and development loan portfolio. This may result in the need for increased capitalization of ATB.”

See news release of Minister Joe Ceci relating the affirmation of DBRS’s AA(high) rating with negative trend) Credit rating: Statement from Minister Joe Ceci 7 July 2017

Credit rating agency rains on Alberta’s parade10-7-17 GM

Ceci stands pat, discounts potential downgrade2-5-17 EJ

How Alberta can reclaim its AAA credit rating status6-3-17 Edmonton SUn

How to fix Alberta’s credit rating6-3-17 EJ

Opposition fears rating downgrade as province’s finances deteriorate17-3-17 EJ

ceci-points-to-signs-of-hope-for-economy24-9-16-ej

DBRS-2016-0415-Credit-Analysis-Report

Standard-and-Poors-2016-0519-Credit-Analysis-Report

Credit rating falls again20-5-16 EJ

Notley shrugs off downgrade as she defends deepening debt16-4-16 EJ

Provincial Credit Rating Comparison *

Province Standard
& Poor’s
Dominion Bond Rating
Service (DBRS)
Moody’s
Investors Service
Alberta
AA
AA (high)
Aa1
British Columbia
AAA
AA (high)
Aaa
Saskatchewan
AAA
AA
Aaa
Manitoba
AA
A (high)
Aa2
Ontario
A+
AA (low)
Aa2
Quebec
A+
A ( high)
Aa2
New Brunswick
A+
A (high)
Aa2
Nova Scotia
A+
A (high)
Aa2
Newfoundland
A
A (low)
Aa2
Prince Edward Island
A
A (low)
Aa2

* Ratings reports are issued to individual provinces and not necessarily at the same time.

Source: http://www.finance.alberta.ca/business/borrowing/index.html