Treasury Corp Victoria’s long-term bonds tapped out in the order of 8 to 11 basis points on Monday, its credit rating shot down, as were those for NSW.
S&P Global Ratings yesterday lowered its long-term issuer credit rating on Victoria to AA from AAA. The short-term rating remains A-1+. The outlook on the ratings is stable.
“We expect Victoria's debt levels to triple relative to operating revenues over the next three years [and] debt levels will remain elevated for many years,” S&P said.
“The government is responding to the exogenous shock by cushioning the economy through this period with large spending initiatives, including a record infrastructure budget.
“This is materially weakening its budgetary performance, with persistent operating deficits and very large after-capital account deficits.”
S&P yesterday also lowered its long-term issuer credit rating on NSW to AA+ from AAA. The short-term rating remains A-1+. The outlook on the ratings is stable.
“We expect NSW's tax-supported debt to rise to about 149 per cent of operating revenues by the end of fiscal 2023, up from 71 per cent in fiscal 2019,” S&P said.
For Victoria, a AA rating is as good as gold.
It’s NSW and an Australian banking industry too befuddled to lend to business that’s the problem.