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  NEWS RELEASE 

For Immediate Release

2006FIN0203-001201

Oct. 5, 2006

Ministry of Finance

 

MOODY’S BOOSTS B.C. CREDIT RATING TO AAA

 


VICTORIA – Moody’s Investors Service has improved British Columbia’s credit rating to Aaa, the highest possible rating, Finance Minister Carole Taylor said today.

                                   

Moody’s, one of the world’s leading credit rating agencies, boosted B.C.’s credit rating to Aaa from Aa1, citing a “well-structured fiscal framework, leading to a reduced debt burden” and the expectation of further improvements in debt ratios over the medium term. This is the second upgrade from Moody’s in less than two years.

 

“Reaching triple-A status speaks to investors’ confidence in British Columbia’s economy and the Province’s sound fiscal management,” said Taylor. “I want to recognize the hard work of British Columbians, along with the leadership shown by the Premier, cabinet and my treasury board colleagues, to turn around B.C.’s economy and get our fiscal house in order. As Moody’s points out, it is the regulatory reforms, the tax reductions, and our prudent forecasts and disciplined approach that restored B.C.’s place as a leader in Canada.”

 

Currently, only the Province of Alberta and the Government of Canada hold Aaa ratings among Canada’s senior governments. British Columbia has not held an Aaa rating from Moody’s since July 1983.

 

Moody’s is one of several ratings agencies that regularly examine the financial health of governments to determine risk associated with the issuance of government bonds. Over the past couple of years, the Province has received five credit rating upgrades from major bond rating agencies, including upgrades from Standard and Poor’s and Dominion Bond Rating Service.

 

The sustained improvements in credit rating saves taxpayers debt service costs and allows for investment in other government priorities. In the fall of 2001, the Province borrowed at interest rates that were nine basis points higher than the Province of Ontario, the market benchmark among provincial issuers. Today, British Columbia’s borrowing rate is four basis points lower than Ontario’s. With each annual borrowing program, this improvement translates to interest savings of about $50 million over a 10-year average term.

 

“Credit rating improvements result in real savings that we can put to other priorities such as health care or education,” said Taylor. “But we must continue with our prudent and disciplined approach if we are to keep generating these kinds of benefits for British Columbians.”

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Media

contact:

Robert Pauliszyn

Communications Director

Ministry of Finance

250 356-2821

 

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