DBRS Morningstar revised the trend to negative from stable on all of Credit Union Central Alberta Ltd.'s long-term ratings due to anticipated impacts on Alberta's economy from the steep drop in oil prices and the coronavirus outbreak.
The rating agency noted Alberta's reliance on oil production and the uncertainty as to when and to what extent oil prices will recover. There will also be impacts from the closure of businesses to help stop the spread of the virus.
The trend on all short-term ratings remains stable.
DBRS Morningstar also confirmed the credit union's long-term issuer rating and long-term senior debt rating at A, and short-term issuer rating and short-term instruments rating at R-1 (low).
The ratings confirmation reflects the credit union's track record of being resilient to economic shocks, although the abruptness and severity of the economic downturn brought by the coronavirus is unparalleled.
The credit union is assessed as SA2 under the agency's support assessment criteria. This reflects expectation of timely systemic external support from the provincial government, resulting in a one-notch uplift to A from the Alberta credit union system's intrinsic assessment of A (low).