Research Update: Province Of Alberta Long-Term Rating Lowered To 'A' From 'A+' On Pandemic-Driven After-Capital Deficits; Outlook Stable

The fiscal shock from the COVID-19 pandemic has further worsened Alberta's budgetary balances, which had not yet recovered from the slump in oil prices that began in 2014, to a greater degree than we had expected. Reflecting the province's large after-capital deficits, which will average more than 25% of total revenues during fiscal 2020-2024, we have lowered Alberta's stand-alone credit profile (SACP) by one notch. Accordingly, we are lowering our long-term issuer credit and senior unsecured debt ratings on the Province of Alberta to 'A' from 'A+' and affirming our short-term rating at 'A-1'. The stable outlook reflects our expectation that post-pandemic economic growth and continuing expenditure management in the next two years will lead to steady improvements in the

...- The fiscal shock from the COVID-19 pandemic has further worsened Alberta's budgetary balances, which had not yet recovered from the slump in oil prices that began in 2014, to a greater degree than we had expected. - Reflecting the province's large after-capital deficits, which will average more than 25% of total revenues during fiscal 2020-2024, we have lowered Alberta's stand-alone credit profile (SACP) by one notch. Accordingly, we are lowering our long-term issuer credit and senior unsecured debt ratings on the Province of Alberta to 'A' from 'A+' and affirming our short-term rating at 'A-1'. - The stable outlook reflects our expectation that post-pandemic economic growth and continuing expenditure management in the next two years will lead to steady improvements in the province's budgetary balances, debt burdens, and debt service coverage (DSC)....

Research Update