Calgary Herald

Alberta downgraded by credit rating agency

- AMANDA STEPHENSON astephenso­n@postmedia.com Twitter.com/amandamste­ph

Credit rating agency DBRS Morningsta­r has downgraded the province of Alberta due to plunging oil prices and the COVID-19 outbreak.

DBRS said in a release Thursday evening that it has downgraded Alberta’s Issuer Rating and Longterm Debt rating to AA (low) from AA and its Short-term Debt rating to R-1 (middle) from R-1 (high). In addition, DBRS Morningsta­r changed the trend on the province of Alberta’s Short-term Debt

to Stable from Negative.

According to the ratings agency, if current global economic conditions and the sharp decline in oil prices are sustained, they will have a “material impact on the provincial economic activity and public finances of Canada’s main oil and gas-producing provinces.”

DBRS estimates Alberta’s 202021 deficit (on an adjusted basis) may exceed four per cent of GDP and that the adjusted debt-to- GDP ratio may rise above 30 per cent in 2020-21 alone.

“Notwithsta­nding these estimates, there is uncertaint­y with respect to the current situation and Alberta has yet to outline a full fiscal policy response,” DBRS said.

The ratings agency said Alberta maintains ample liquidity to withstand near-term market volatility, with more than $4 billion in cash and $16 billion in less liquid investment­s within the Alberta Heritage Savings Trust Fund and other endowments.

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