DBRS confirms Toronto debentures

DBRS said it confirmed the ratings of the debentures issued by the City of Toronto at AA.

The trends remain stable, supported by the city's relatively wealthy tax base and strong resolve in restraining spending and finding permanent solutions to eliminate the budget gap.

However, debt remains under considerable pressure as a result of heavy capital spending, which is eroding financial flexibility and could affect the city's rating if increases are not contained, the agency said.

Helped by spending discipline and unexpected revenue improvement, the city ended 2010 with an operating surplus of $554 million, DBRS said.

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