What is a credit rating? And what happens when it falls? star-news.press/wp

The Quebec has seen a credit rating of the S & P Global Rating Agency that passes on Wednesday A.

This is the Quebec since its S & P’s credit rating since 1993; It also increased in 2017.

Quebec is not the only province that has fallen credit rating in Canada. British Columbia, for example, has left from AA-à A +.

What is a credit rating?

Credit grade-oriented credit rating in the country or province is an indicator of its ability to return its duties. This capacity makes specialized agencies make a literate notice, called rating agencies, and in the case of S & P, AAA is going to D.

If you have a retirement essence, you want to know if you want to know the probability of the deposit of the deposit, simple individual and so on, province, business duty ….

The credit rating is an evaluation of the international credit agencies of our ability to return our debt or repay from our solvency. It’s a bit of newsletter we receive every yearSébastien Mc Mahon, industrial Alliance is the main strategist.

What is an appraisal agency?

A rating agency is a specialized organization that carries out the financial assessment of states, communities and companies and collecting credit rating of these entities. These pay agencies for this service.

S & P Global (usually called S & P, for Standard & Poor’s) is considered one of the main rating agencies Moody’s Et et Fitch team. All of these agencies are Americans.

However there are other agencies, such as Morningstar DBRSCreated in Toronto. Quebec evaluates four agencies mentioned, but also Japanese Credit Grading Agency (JCR).

Before lending on the stock market, companies or interested interests need the services of one of these agencies.

To assess the state assessment, the rating agency will take several factors to consider, including gross domestic product (GDP), due to its debt and tax revenue.

Sébastien Mc Mahon also explained the Ministry of Finance of the question, annually, to present his plan about his ability to repay its plan.

What impact is the credit assessment?

It is a sign that is sent to the market. After that, the market receives his ideaSébastien Mc has launched Mahon.

Credit-point drop Some borrowers can discard the situation from trusting, the ability to return its bonds was evaluated.

The risks that are considered higher, the borrower could arouse interest in the loans of that State to finance his debt.

When we want to strengthen money in the markets, it will cost a little more for the new debt.

According to Luc Godbout, the domino effect can also be created by calling credit score discount.

A discount has a negative impact on the loan cost. If it has a negative impact on the cost of the loan, this means that we will pay more interest on lice. If we pay more interest in debt, this means that our deficit will be greater. If our deficit is larger, this means that the greater the debt will be …

If the study of credit rating is done under a macroscopic batch, the impact of this decline in the state economy can sometimes be made for citizens.

The effect of debt cost affects our ability to finance our social programsIt emphasizes Sébastien Mc Mahon.

How to increase your rating? Will other agencies fall on the coast of Quebec?

Structural deficits, not easy to correctLuc defines the godbout first.

A quotation restart plan is required to find a better assessment of the ability of a state to return their duties. Sometimes with painful options.

If we want to establish a structural deficit, we need to increase, opening the current government (Quebecois). If not, the only remaining option is less than expenses to absorb this structural income.

Mr. Godbout, however, believes that other agencies do not have to continue and fell the rating. In the past, S & P had no effect on others. It doesn’t mean it’s happening in one direction …

Luc Godbout, however, recognized that eyes will be finished in other assessment agencies, as an agency Moody’s It is likely to its dimensions rather than S & P.

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