January 14, 2009

Vancouver on credit watch over Olympics

A credit watch was posted for the city of Vancouver as it grapples with a $458 million shortfall to build an Olympic Village for the 2010 Winter Games.

The bond rating agency Standard & Poor's Tuesday issued the watch after news broke the city had gone to the provincial British Columbia government for help after putting up $100 million in city funds, the Globe and Mail reported.

The city has a AA-plus rating now, and the watch could make future loans more expensive.

Standard & Poor's is concerned that, without the lender's financing, the city might have to step in and finance the project, including the potential of borrowing a significant amount of debt to complete the Olympic Village, S&P credit analyst Stephen Ogilvie said in his report.

In September, the principal lender, the Fortress Investment Group hedge fund of Wall Street cut off the cash advances.

The Vancouver Sun reported Mayor Gregor Robertson e-mailed British Columbia Premier Gordon Campbell last week saying existing funds would be depleted by Feb. 14.

The provincial cabinet met Tuesday, and the full legislature is scheduled to reconvene Feb. 10, The Province reported.