Agencies Archives - Page 4 of 5

Another Downgrade from Moody’s: Aa2 to Aa3

4Oct

By Bob AscahNo Comments

Agencies, ATB, Credit Ratings

Another Downgrade from Moody’s: Aa2 to Aa3

Analysis and Opinion On 2 October 2020, Moody's Investors Service downgraded the Province's debt to Aa3 from Aa2 while revising the outlook to Stable from Rating under Review. The short report and review was initiated on 31 August 2020 shortly after the provincial government's skeletal First Quarter Fiscal Update. The downgrade leaves Alberta one notch above the single A rating category. Downgrades in theory mean the borrower will have to pay higher rates of interest on its debt. The downgrade was expected and gave a balanced view on the fiscal picture acknowledging the province's strong liquidity position and the province's fiscal capacity to "enact additional tax measures to support revenue growth, which nevertheless the provincial governments have been reluctant to fully use in recent y...

8Sep

By Bob AscahNo Comments

Agencies, Budget, Energy, Government Finances, Politics, Uncategorized

After waiting an extra 2 months 2019-20- some major surprises missed in February forecast

Updated 10 November 2020 In an earlier report on the crucial role played by the Alberta Petroleum Marketing Commission (APMC) in government finances, we highlighted the Commission's role in overseeing the North West Redwater Upgrader investment, commenced in the latter years of the Stelmach regime. We raised some doubts, given APMC's record with the North West Redwater Partnership (NWRP), about its competence in negotiating with TC Energy on the Keystone XL project. APMC is also the agency tasked with negotiating the Energy East commitment and the controversial oil-by rail contracts. With the two-month delay in the publication of the Government of Alberta's Annual Report and audited consolidated financial statements, the public finally has been apprised that Alberta's budget shortfal...

24Aug

By Bob AscahNo Comments

Agencies, ATB

ATB quietly reports another losing quarter- Analysis and Opinion

Curtis Stange, ATB President and CEO Source ATB.com On Thursday 13 August, ATB Financial issued its financial results for its quarter ending 30 June 2020. The rosy press release "Supporting Alberta's economic recovery" acknowledged the "triple impact event" of COVID--19, oil price shock, and market volatility, while affirming the results "demonstrate its financial strength while supporting customers." Buried in the news release was the fact that ATB had lost $114 million in the quarter driven mainly by another $245 million provision for loan loss. This is the second consecutive quarterly loss for ATB which lost $93 million in the previous quarter. Not to be deterred by persistent negative news, the release boasted: In the first quarter, ATB delivered solid operating revenue of $424.6 m...

20Jul

By Bob AscahNo Comments

Agencies, Financial Institutions, Opinion/Research

AIMCo’s Board reports

Updated 21 July 2020 On 9 July AIMCo's board of directors issued a summary of results of its own review of the "VOLTS investment strategy." VOLTS stands for Volatility Trading Strategy. The seven page summary report, dated 30 June, was posted on AMICo's website. Board's mandate Three priorities, set by the Board during its 14 May announcement, were to: limit the damage from the volatility trading strategy; confirm that no other investment strategies could generate substantial losses in very unusual circumstances; and undertake a comprehensive review of the volatility trading strategy to identify lessons learned and corresponding enhancements to AIMCo’s investment and risk management processes....(to) be shared with AIMCo’s clients and shareholder with a target completion of mid-June."...

Heritage Fund loses lustre- Time to rethink its existence-Analysis and Opinion

14Jul

By Bob AscahNo Comments

Agencies, Government Finances, Opinion/Research

Heritage Fund loses lustre- Time to rethink its existence-Analysis and Opinion

The Alberta Heritage Savings Trust Fund (AHSTF), established by Peter Lougheed in 1976, has been seen as a Crown jewel of Alberta’s fiscal management. Recently, the AHSTF long viewed by rating agencies as a vehicle to stabilize finances, has begun to lose its lustre. Is the Heritage Fund merely a relic of Alberta’s golden day in the sun when money poured into provincial coffers? Should the AHSTF be eliminated given the rise of Alberta’s debt. How does the reporting on the AHSTF’s management obscure what should be a laser focus on debt management? (more…)

15Jun

By Bob Ascah1 Comment

Agencies, ATB, Uncategorized

ATB Financial: how results compare

CAUTION: Writing this blog has been the most challenging undertaking since I began Albertarecessionwatch.com (now Abpolecon.ca) four years ago. Writing about a former employer and one of the "Crown jewels" of Alberta's public sector and knowing so many former colleagues still working at ATB creates a dilemma when examining critically this institution's financial condition. ATB's financial condition should be of interest to all Albertans who have a stake in the success, or failure, of this venerable institution. This post has been frustrating to write because there is so much information available on banking institutions used to compare ATB's performance. The ocean of financial information has so many layers built up over years by both internal organizational dynamics as well as external r...

1Jun

By Bob AscahNo Comments

Agencies, ATB

ATB facing headwinds (Part 1)

Directors and Politics ATB Financial will have three new directors as it charts a challenging course forward. On 13 May, Jim Davidson, Andrew S. Fraser, and J. Robert Logan were quietly appointed to ATB's board effective 16 June 2020 for three- year terms. At the same time Wendy Henkelman (a director since 2014) and Mary Ellen Neilson (director since 2017) were re-appointed. No press release has been issued to date by either ATB or the Treasury Board President and Minister of Finance, although at ATB's virtual public annual meeting, the new directors were expected to be introduced. Given the surprising absence of public disclosure, the following disclosure is a well educated guess of who these new board members are. Jim DavidsonSource: https://oilandgascouncil.com/event-speakers/...

Keystone-XL, the Alberta Petroleum Marketing Commission and the Borrowers

9Apr

By Bob AscahNo Comments

Agencies, Credit Ratings, Energy, Energy, Government Finances, Opinion/Research

Keystone-XL, the Alberta Petroleum Marketing Commission and the Borrowers

At the end of March, the Alberta cabinet passed Order in Council 104/2020 which authorized the “President of Treasury Board and Minister of Finance to make advances to or purchase securities of the Alberta Petroleum Marketing Commission.” In addition, the Minister was given the authority to raise: “up to $2 000 000 000, by the issue and sale from time to time of notes, bonds, debentures or interest-bearing or non-interest-bearing treasury bills issued by the Crown in right of Alberta or any other securities under which the Crown in right of Alberta is the debtor (collectively referred to hereafter as “Government securities”) for the purpose of making advances to or purchasing securities of the Alberta Petroleum Marketing Commission in respect of the development of a...

3Apr

By Bob AscahNo Comments

Agencies, Energy, Government Finances, Opinion/Research, Politics

Politics of Alberta Growth Mandate (AGM)

Politics of the Alberta Growth Mandate In past articles, the Alberta Growth Mandate was explained as a significant policy initiative in the first NDP budget of October 2015. It should be noted that, in the fall of 2015, Alberta was reeling from significant declines in investment and job losses, and a rookie NDP government was looking for quick wins to support jobs in the Alberta economy. The policy objective was to support Alberta companies (as defined by the Alberta Investment Management Corporation (AIMCo)) and based on meeting one of the following criteria. a. Creates jobs in Alberta b. Builds new infrastructure in Alberta c. Diversifies Alberta’s economy d. Supports Alberta’s growth e. Connects Alberta’s companies to export markets f. Develops subject matter expert...

Alberta ‘Growth’ Mandate- Analysis and Opinion

22Mar

By Bob AscahNo Comments

Agencies, Budget, Government Finances, Opinion/Research, Politics

Alberta ‘Growth’ Mandate- Analysis and Opinion

While now is not necessarily the best time to be taking stock of one's investment portfolio, government and provincial agency officials, who face a March 31 fiscal year end deadline, are concerned about the impact of accounting rules that require "fair market accounting" for their investments. The performance of both bond and equity markets over the next ten days will determine whether forecasts for investment income in the provincial budget ($1.96 billion for the Heritage Fund) will actually pan out. Investment income for investment portfolios are typically composed of two types of income: (1) dividends and interest payments or cash distributions from private equity, and (2) increases or decreases of the "fair value" of the investment at year -end compared to the initial cost of buy...