Auckland Council’s strong credit ratings reaffirmed
26 November 2012
Auckland Council’s strong credit ratings reaffirmed by international agencies
Two of the world’s largest credit rating agencies have reaffirmed Auckland Council’s credit ratings, following annual reviews, leaving the biggest local body in Australasia as one of the highest-rated entities in New Zealand.
Moody’s credit rating agency today affirmed council’s rating of “Aa2” with a stable outlook, while Standard & Poor’s affirmed the council’s long-term rating of “AA” and short–term rating of “A1+” last week.
Standard & Poor’s noted in its report Auckland Council’s capable and conservative financial management, strong and diversified economy, high budget flexibility, supportive institutional framework and positive liquidity position.
The Mayor has welcomed the news saying it is a real acknowledgment of the council's financial prudence.
"Retaining our credit rating as before is positive news amidst a global environment of uncertainty with many organisations facing rating downgrades," says Len Brown.
"Auckland Council has carefully balanced the need for keeping debt levels as low as possible while making the investment required to cope with the growth being experienced as Auckland becomes a truly international city.
“It is pleasing that Standard & Poor’s has noted the important role of the Auckland region in New Zealand’s economy as the country’s financial and economic hub.”
Moody’s noted New Zealand’s well-established and stable institutional framework for local government, the close relationship between Auckland Council and Central Government and Auckland’s large and diversified economy. Its rating takes into account the increasing debt levels relating to major upgrades in transit and water infrastructure.
Auckland Council remains one of New Zealand’s highest-rated organisations; its credit ratings are better than the major domestic banks and similar to other local government bodies.
Auckland Council’s Standard & Poor’s rating is one notch below New Zealand Government’s domestic credit rating of “AA+” and on par with its foreign currency credit rating of “AA”. The AA rating is the third-highest on the Standard & Poor’s credit rating scale.
The Moody’s rating is two notches below the NZ Government’s “AAA” credit rating but remains the third-highest rating on the Moody’s credit rating scale.