Any losses the Caisse de dépôt et placement du Québec might have to take on its investment in asset-backed commercial paper (ABCP) won’t have an effect on the province’s finances, according to Fitch Ratings.
“Based on information to date, Fitch anticipates little risk of ultimate losses in Caisse’s investment portfolio having a negative impact on the finances of the province itself, but will monitor closely developments in the ABCP and other Canadian financial markets,” says a statement from the credit rating agency.
Fitch notes that the province’s debt levels remain high, with pension fund liabilities and outstanding direct debt of $122.6 billion in fiscal 2007, equal to approximately 43.3% of gross domestic product, the highest among all the provinces.
The credit rating agency also revised the rating outlook on the province’s long-term foreign and local currency debt to positive from stable. And Fitch affirmed its AA- ratings on the province as well as affirmed the F1+ rating on the province’s short-term debt.
Last month, the pan-Canadian investors committee for third-party structured asset-backed commercial paper (ABCP) reached an agreement in principle on late Sunday afternoon regarding a comprehensive restructuring of the ABCP issued by 20 of the trusts covered by the Montreal Accord.
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