Newsrelease

June 14, 1999
Edmonton, Alberta

"Alberta's credit rating upgrade is a ringing endorsement of the province's solid fiscal game plan. And the best part is that all Albertans share in the rewards through lower borrowing costs."

Moody's upgrades Alberta's domestic debt rating to Aa1

Alberta's hold on the top credit rating in Canada gained strength today with an upgrade from one of North America's top bond rating agencies.

Moody's Investors Service upgraded Alberta's domestic currency rating to Aa1 from Aa2, with a positive outlook for future ratings. No other province is rated that high; even the federal government's Aa1 rating comes with a "stable" rather than "positive" outlook.

"This is proof positive that Alberta's prudent fiscal course is the right one," said Provincial Treasurer Stockwell Day. "Moody's congratulated us for the work we've done so far in erasing the provincial debt. They went on to praise Alberta's vision for the future with initiatives like the new Fiscal Responsibility Act that requires the government to continue to put three quarters of annual surpluses to the debt."

In its own news release, Moody's cited "the province's dramatic improvement in its debt profile" for the upgrade. "In recent years the province undertook a major realignment of spending priorities and the substantial budgetary surpluses that were generated were applied to debt reduction. Going forward, debt will continue to decline," Moody's stated.

The agency also noted that Alberta has taken great strides to moderate the effect on its budget of the volatility of the energy sector -- especially by conservatively forecasting commodity prices -- and has handled spending pressures with excellent fiscal discipline.

"It is expected that expenditure pressures, including those attributed to population growth, will be addressed within the context of the fiscal discipline that has been exhibited in recent years," Moody's added.

Reflecting Alberta's top rating, the province can borrow money at a lower cost than any other province. All four major rating services now have Alberta ranked as the top province in Canada. A chart is attached showing how each province stacks up. Moody's maintained Alberta's foreign currency rating at Aa2, the same as the federal rating. Provinces can't be ranked higher than Canada in this category.

Attachments:

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Click here for graphic - "Canadian Government Ratings at a Glance"

Click here for graphic - "Standard and Poor's, and Moody's Ratings History for Alberta"

For further information, please contact:

Shannon Taylor
Director of Communications
Alberta Treasury
(780) 427-5364

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