DBRS Places the Rating of the City of Vancouver Under Review with Negative Implications

DBRS has today placed the Long-Term Debt rating of AA (high) of the City of Vancouver (the City or Vancouver) Under Review with Negative Implications. The rating action responds to a recent announcement made by the City and reflects material developments involving the funding sources for the Vancouver Olympic Village that could have an adverse impact on the credit profile of the City. The City is responsible for the project subject to a “completion guarantee,” which creates considerable uncertainty regarding the credit profile and may lead to a sizable amount of new debt.

The potential new debt related to the Olympic Village combined with recent increases in the DBRS-adjusted net tax-supported debt burden may push debt to a level no longer consistent with an AA (high) rating. The recent increases in the debt burden is highly attributable to TransLink (rated AA), the regional transit authority, which has increased debt substantially to fund current capital projects. As Vancouver is joint and severally liable for the debt of TransLink, DBRS attributes a proportionate share of TransLink’s debt to the City.

DBRS’s review will focus on obtaining further information on the City’s current debt trajectory and the impact of the uncertainty surrounding financing of the City’s Olympic obligations, including any future announcements by the province of British Columbia (rated AA (high)).

Notes:
The applicable methodology is Rating Canadian Municipal Governments, which can be found on our website under Methodologies.

This is a Corporate (Public Finance) rating.

This rating is based on public information.