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Canadian Corporate Issuers Could Face Further Downgrades As The Economy Contracts

TORONTO (S&P Global Ratings) May 11, 2020--The COVID-19 pandemic and plummeting oil prices will drive a 5%-plus economic contraction in Canada this year, peaking in the second quarter at an annualized decline of about 34%, said a report published today by S&P Global Ratings.

"In our base-case forecast, the Canadian economy will not get back to pre-COVID-19 levels until the third quarter of 2021," said S&P Global Ratings credit analyst Madhav Hari. "Against this backdrop, and combined with weakened capital market access for several speculative-grade issuers, we anticipate a significant negative impact on corporate earnings and credit quality, with potential negative rating actions on about half of the Canadian corporate portfolio," Mr. Hari added. 

The report, Canadian Corporates Face Unprecedented Credit Stress In 2020 Thanks To Plummeting Oil Prices And COVID-19," discusses the sector outlook and rating impact on the oil and gas, metals and mining, transportation, forest products and building material, retail, media, telecom and cable, and consumer products portfolios we rate.

This report does not constitute a rating action.

The reports are available to subscribers of RatingsDirect at www.capitaliq.com. If you are not a RatingsDirect subscriber, you may purchase copies of these reports by calling (1) 212-438-7280 or sending an e-mail to research_request@spglobal.com. Ratings information can also be found on S&P Global Ratings' public website by using the Ratings search box located in the left column at www.standardandpoors.com. Members of the media may request copies of these reports by contacting the media representative provided.

Primary Credit Analyst:Madhav Hari, CFA, Toronto (1) 416-507-2522;
madhav.hari@spglobal.com
Media Contact:Jeff Sexton, New York (1) 212-438-3448;
jeff.sexton@spglobal.com

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