November 22, 1999
(Finance)

The following statement was issued today by Paul Dicks, Minister of Fiance. It was also read in the House of Assembly:

Credit Rating Upgrade

It gives me great pleasure to inform my honourable colleagues that today Standard and Poor's has upgraded Newfoundland and Labrador's long-term issuer credit rating to A minus from triple B plus. Standard and Poor's also upgraded its long term senior debt ratings on the province and on Newfoundland and Labrador Hydro to A minus. The agency went on to affirm its A-2 short term ratings on the province's treasury bill program and its A-2 short term ratings on the commercial paper of Newfoundland and Labrador Hydro.

This is the first time since the collapse of the groundfishery, and the credit downgrades which resulted, that this province has held an A minus rating from any agency. In fact, until today, we were the only province not to hold a A rating from any of the major credit rating agencies.

I am pleased to say that this is the second time in 25 years that we have received a credit rating upgrade, and that both upgrades have occurred during this administration's time in office. The other came from Dominion Bond Rating Service in 1998, which upgraded us from triple B(low) to triple B.

It is pleasing to see Standard and Poor's, one of the most influential credit rating agencies in North America, echo our own confidence in the economic growth of Newfoundland and Labrador though this credit rating upgrade. They cite strong GDP growth in the past two years, which is expected to continue into the medium term, as an important rating consideration. They go on to say, that the province's "firm fiscal restraint has resulted in the stabilization of the provincial debt burden, even including the direct debt incurred to make special pension contributions."

Standard and Poor's also note that offshore oil production is a major contributor to GDP growth, that employment gains are broadly based and that consumer confidence has been bolstered. I would point out that their analysis has taken into account the impact of delays in the development of Voisey's Bay, as well as the recent tax reductions announced by this government.

This upgrade is good news for Newfoundland and Labrador. It enhances the ability of the province, and its Crown corporations, to access the financial markets on more favourable terms and at lower interest rates. It affirms what we have said about the economic status of the province, and is yet another positive third party endorsement of the success of our plan for economic growth and development. Finally, both at home and abroad, these third parties are reiterating what our premier has been telling the world - in New York last week, and in Toronto again today - that Newfoundland and Labrador is a good place in which to invest.

1999 11 22                   2:35 p.m.