The credit rating agencies still seem to be sweet on Canada, if Fitch Ratings is any indication. Canada sold $3-billion (U.S.) in U.S.-dollar denominated five-year bonds on Tuesday, scoring a yield of just 0.875 per cent – a touch above the yield on U.S. five-year Treasury bonds but well below the current 1.4 per cent yield on the five-year Government of Canada bond.
In responding to the sale, Fitch maintained Canada’s top-notch AAA-rating, which is looking increasingly rare as other countries – including France and the United States – get taken down a notch. In its release, Fitch noted: “Canada’s ratings are supported by its institutional and structural strengths, underpinned by effective policy response and a history of macroeconomic and social stability. Canada’s macro prudential approach to policymaking has allowed years of economic growth and stable prices in Canada.
“While the government’s indebtedness has increased since the onset of the economic crisis, prudent fiscal management and budget surpluses over most of the past decade have strengthened Canada’s credibility to cope with the recent deterioration of its fiscal balance over the medium term.”