Jan. 13 (Bloomberg) -- Vancouver’s debt rating may be cut by Standard & Poor’s after the Canadian city agreed to cover a funding shortfall on construction of the athletes’ village for the 2010 Winter Olympics.

Vancouver stepped in as manager and financier of the C$1.1 billion ($900 million) development after New York-based Fortress Investment Group LLC stopped advancing money for construction.

“Depending on the scope of the city’s financial obligation, we believe Vancouver’s potential debt burden might not be consistent” with its AA+ rating, the credit rating company said today in a statement.

By the end of this week, the city will have contributed C$100 million to keep the project on schedule for the February games, Mayor Gregor Robertson said last week. The city is negotiating to get Fortress to resume disbursements, he said.

Fortress halted pay outs on a C$750 million loan to Vancouver-based builder Millennium Development Corp. after the projected cost of construction exceeded the value of the loan, according to the city.

Vancouver agreed in 2007 to provide a “completion guarantee” on the project to Fortress, the city said.

To contact the reporter on this story: Christopher Donville in Vancouver at cjdonville@bloomberg.net.

Last Updated: January 13, 2009 16:35 EST