February 25, 1999
(Finance)

Moody's confirms province's credit rating

Minister of Finance Paul Dicks today announced that Moody's Investors Service has confirmed the province's credit rating of "Baa1" with a stable outlook.

This latest rating affirmation follows the announcement by the Canadian Bond Rating Service in April 1998 which confirmed the province's "BBB" rating; the announcement in July by the Dominion Bond Rating Service that the province's rating was being increased from "BBB"(low) to "BBB"; and the confirmation of the province's "BBB+" rating by Standard and Poor's last November.

"The confirmation of our credit rating by Moody's indicates a continued confidence in Newfoundland and Labrador's economic prospects," said Minister Dicks. "The rating reflects our strong commitment to fiscal control and to achieving a balanced budget through spending restraint, as well as the potential for GDP growth based on our expanding resource-based industries."

In confirming the province's rating, Moody's noted government's commitment to prudent fiscal management and its goal of a balanced budget, despite the continuing economic impact of the ground fishery moratorium and recent years' reductions in federal transfers. The agency stated that the rating also reflects the province's low incomes and high debt level, but that anticipated economic growth in the medium term should have a positive impact on the credit outlook.

The four rating agencies will review the province's ratings again during 1999, following the new Budget.

Media contact: Paula Dyke, (709) 729-0329.

1999 02 25                   10:15 a.m.