Third Rating Agency Upgrades Nova Scotia Credit

Another bond rating agency has upgraded Nova Scotia's credit rating.

Standard and Poors increased the province's long-term rating today, Sept. 18, to A+ from A. The outlook is stable.

The upgrade follows similar changes by Moody's Investors Service and Dominion Bond Rating Service earlier this year.

In a news release, the agency said the new credit rating reflects the province's improved financial results, including:

• "significant progress" in reducing its debt burden and "expected continued improvement in the medium term"
• "A sustained improvement in fiscal performance in the past five years, as reflected in the achievement of five consecutive balanced budgets...."
• "Substantially improved transparency in the province's financial reporting practices."

Standard and Poors noted that Nova Scotia still faces fiscal challenges, including rising health care costs and higher infrastructure requirements. However, it said "spending pressures in these areas are similar to those experienced by both domestic and international peers."

Finance Minister Michael Baker said it is encouraging to see that all three major bond rating agencies have now formally recognized Nova Scotia's improved financial performance.

"We are following through with our debt management plan," said Mr. Baker. "This is the last year that Nova Scotia's debt will grow."

The province's credit ratings have seen continued improvement over the last few years, with upgrades from all three agencies in 2003 and 2004, and positive outlook reports in 2005.

A higher credit rating makes the province's bonds more attractive to investors and helps lower the overall cost of borrowing.