(Reuters) - Credit rating agency Moody’s lowered its outlook on Ontario’s debt ratings to ‘negative’ to reflect the Canadian province’s growing debt burden, even as growth in the region slows down.
The revised outlook on Ontario’s Aa1 rated debt affects approximately C$190 billion in securities issued by Canada’s most populous province.
“The negative outlook on the province reflects the softening economic outlook, Ontario’s growing debt burden, and the extended timeframe to achieving a balanced budget,” said Moody’s Assistant Vice President Jennifer Wong, lead analyst for the Province of Ontario
Last month, Ontario government had slashed its growth, revenue and reserve targets but had reiterated the timetable for eliminating its 2011-12 deficit of C$16 billion ($15.2 billion) by 2017-18.
This revision comes within days of the agency’s announcement of its intention to review its ratings for all European Union countries in the beginning of 2012.
The rating agency said inability to address the weakening fiscal position in the next provincial budget due in March 2012 would add downward pressure in the regions rating. (Reporting by Himank Sharma and Aman Shah in Bangalore; Editing by Gary Hill)