May 30, 2012 / 8:18 PM / 5 years ago

TEXT-S&P revises outlook on 7 Ontario GREs to negative

Overview	
     -- We are revising the outlook to negative from stable on seven 	
government-related entities (GREs) in the Province of Ontario.	
     -- At the same time, we're affirming the 'AA-' issuer credit ratings on 	
the GREs.	
     -- The outlook revision reflects the April 25 outlook revision on the 	
province.	
	
Rating Action	
On May 30, 2012, Standard & Poor's Ratings Services revised its outlook to 	
negative from stable on seven government-related entities (GREs) in the 	
Province of Ontario. The outlook revisions reflect the April 25 outlook 	
revision to negative from stable on the Province of Ontario (see "Province of 	
Ontario Outlook Revised to Negative from Stable on Risks To Fiscal Plan," 	
published April 25, 2012, on RatingsDirect on the Global Credit Portal). At 	
the same time, we are affirming our 'AA-' long-term rating on these entities, 	
as well as the 'AA-' senior unsecured debt rating on ORNGE Issuer Trust.	
	
Rationale	
The following entities, which rely to a great--if not complete--extent on 	
funding through annual grant appropriations from the province, are affected: 	
Durham District School Board, Ontario Infrastructure and Lands Corp., ORNGE, 	
Ottawa Catholic School Board, Simcoe County District School Board, The 55 	
School Board Trust, and York Region District School Board.	
	
We rate these entities on the basis of our GRE methodology, under which they 	
mostly benefit from a "very high" likelihood of support from the provincial 	
government thanks to their "very important" policy role and "very strong" link 	
with the province. 	
	
Outlook	
The negative outlook reflects our view that there is at least a one-in-three 	
likelihood that we could lower the long-term ratings one notch within two 	
years. The outlook revision is contingent on the negative outlook assigned to 	
the Province of Ontario on April 25, 2012, given the fact that these entities 	
generally rely overwhelmingly on the province for their revenues. We could 	
lower the ratings on the GREs if we lowered the 'AA-' long-term issuer credit 	
rating on the province. Conversely, we could revise the outlook to stable if 	
we saw that the government's fiscal position was improving in the next one-two 	
years, and remained on course to achieve budgetary balance by fiscal 2018. 	
	
Related Criteria And Research	
     -- Province of Ontario Outlook Revised to Negative from Stable on Risks 	
To Fiscal Plan, April 25, 2012	
     -- General Criteria: Rating Government-Related Entities: Methodology And 	
Assumptions, Dec. 9, 2010	
	
Ratings List	
	
Ratings Affirmed; CreditWatch/Outlook Action	
                                        To                 From	
Durham District School Board	
Ottawa Catholic School Board	
Simcoe County District School Board	
York Region District School Board	
ORNGE	
 Issuer Credit Rating                   AA-/Negative/--    AA-/Stable/--	
	
Ontario Infrastructure and Lands Corp.	
 Issuer Credit Rating                   AA-/Negative/A-1+  AA-/Stable/A-1+	
	
55 School Board Trust (The)	
 Senior Secured                         AA-/Negative       AA-/Stable         	
	
Ratings Affirmed	
Durham District School Board	
 Senior Unsecured                       AA-                	
Ontario Infrastructure and Lands Corp.	
 Senior Unsecured                       AA-                	
 Commercial Paper	
  Global scale                          A-1+               	
  Canada scale                          A-1(HIGH)          	
Ottawa Catholic School Board	
 Senior Unsecured                       AA-                	
Simcoe County District School Board	
 Senior Unsecured                       AA-                	
York Region District School Board	
 Senior Unsecured                       AA-                	
Ornge Issuer Trust	
 Senior Unsecured                       AA-                	
	
	
Complete ratings information is available to subscribers of RatingsDirect on 	
the Global Credit Portal at www.globalcreditportal.com. All ratings affected 	
by this rating action can be found on Standard & Poor's public Web site at 	
www.standardandpoors.com. Use the Ratings search box located in the left 	
column.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below