Released on November 27, 2008
Standard & Poor's Cites Debt Reduction, Strong Financial Results as Key Drivers
Standard & Poor's (S&P) has boosted Saskatchewan's long-term rating for the province from AA to AA+ with a stable outlook.
"This is excellent news, and confirmation that our government is on the right financial path after just over a year in office," Finance Minister Rod Gantefoer said. "We are being recognized for our emphasis on paying down debt in a responsible manner and our overall strong financial performance."
S&P noted in its Nov. 26 news release that the upgrade reflects "strong financial results in fiscal 2008 and a low-and-steadily declining debt burden". The release goes on to say "Saskatchewan produced what we believe are standout financial results in fiscal 2008 (year ended March 31), with very strong operating and after-capital surpluses".
The S&P release also notes "The stable outlook reflects our expectation that the province will continue to generate solid operating surpluses and that it will make its announced reductions to debt outstanding. The economy is expected to decelerate albeit at a slower pace than that experienced by the rest of the country".
S&P also cited strong economic performance with real GDP growth of 2.8 per cent, a strong labour force, and an increase in population as contributing factors for the upgrade.
Credit rating upgrades are significant because the higher the credit rating of an issuer (the province) the lower the cost of borrowing. As well, a higher credit rating attracts a broader group of investors who can purchase Saskatchewan's issues - the higher the rating, the lower the risk; certain investors require minimum credit ratings.
"Credit rating upgrades provide independent, third-party validation that we're managing our finances in a responsible way on behalf of Saskatchewan people," Gantefoer said. "Our government is working hard for the people of this province and they're seeing results - through debt pay-down, tax cuts, enhancements to social programs, a commitment to infrastructure and other initiatives. At the same time, we're seeing population increases and strong employment, and we're expected to lead the country in economic growth this year and next. It's a great time to be in Saskatchewan."
The S&P news release can be found on the S&P website at www.standardandpoors.com by going to Products & Services/Ratings/Ratings News & Commentary.
-30-
For more information, contact:
Lorri Thacyk
Finance
Regina, Phone: 306-787-6578
Email: lorri.thacyk@gov.sk.ca
Cell: 306-526-6793