The Government of Nunavut has been given a credit rating for the first time.

Moody's Investors Service gave the territory a strong rating of "Aa1 – stable".

Moody's is a well recognized credit rating agency used by a number of Canadian organizations and governments.

Nunavut Finance Minister Keith Peterson welcomed the rating. In a release, he said it marks an important step in the Government of Nunavut’s fiscal development.

Credit ratings are independent assessments of whether organizations can meet financial obligations. The ratings are based on debt levels, revenue, financial policy and other factors.

A good rating allows an organization to borrow money more cheaply.

The new credit rating comes a few months after Ottawa doubled Nunavut's debt limit to $400 million.