British Columbia’s Aaa credit-rating outlook was reduced to negative from stable by Moody’s Investors Service, which cited the province’s rising debt burden in a weakening economy.
The revision affects C$39.8 billion ($40 billion) of outstanding debt, New York-based Moody’s said in a statement. Net debt has swelled to C$33.6 billion, or 82 percent of revenue, at the end of March, from 65 percent of revenues four year earlier, according to Moody’s.
British Columbia projected on Nov. 28 that its fiscal 2012-2013 budget deficit will widen to C$1.47 billion, or C$328 million more than the previous forecast of C$1.14 billion, reflecting lower property-tax revenue and declining coal prices.
The outlook change reflects “the risks to the province’s ability to reverse the recent accumulation in debt with the softened economic outlook, weaker commodity prices and continued expense pressures,” Jennifer Wong, Moody’s lead analyst for the province, said in the statement.
British Columbia issued C$500 million of 3.2 percent notes maturing June 18, 2044 yielding 94.5 basis points more than federal benchmarks last month.