NEWS RELEASE
26 November 2012

Credit rating agency praises Council team

Wellington City Council’s AA/A-1+ credit rating has been reaffirmed by Standard and Poor’s – a strong endorsement of the Council’s financial management.

Councillor Ian McKinnon, the Chair of the City Council’s Audit and Risk Committee and Deputy Mayor, says Council Chief Executive Garry Poole, his senior managers and finance team deserve congratulations for the positive rating report from the international financial services company.

Cr McKinnon says S&P makes particular mention of the Council’s “very capable” management team and its financial and asset-management strengths.

In its report, S&P says Wellington City's key strength is its excellent financial management. “Standard & Poor's considers the council's asset-management strategies as being sophisticated, given they are inextricably linked to the council's financial-management tools.

The S&P report adds: “The council manages both external and internal risks through an extensive and credible management framework. While the institutional framework within New Zealand promotes a culture of strong management, Wellington City tends to exceed its legislative requirements.”

Cr McKinnon says the Wellington City Council credit rating is only one notch below the Crown’s – which traditionally has the country’s best credit rating. “This affirms that the city is in good hands.”

S&P says Wellington City’s debt is likely to increase in the next few years before peaking in 2018. It says the Council faces significant spending in the next few years as it deals with earthquake-strengthening of buildings and also settlements relating to leaky homes liabilities. Cr McKinnon says the Council is well aware of these challenges and adds that this spending has been appropriately forecasted and budgeted for.

“The rating from S&P confirms that we have our debt profile firmly under control,” says Cr McKinnon.

Mayor Celia Wade-Brown, the Council’s Finance Portfolio Leader, was interviewed by Standard and Poor’s as part of the rating assessment.

“Councillors realise that the city's finances must focus on key priorities of city resilience and affordability while considering the future wellbeing of residents, businesses and visitors,” she says.
“Councillors and staff are working together to ensure the ongoing financial sustainability of the Council, looking at new ways of service delivery and the use of technology.”

In its report, S&P says the stable outlook for the Council “reflects our view that the stand-alone credit quality of Wellington City will remain very strong, and our expectation is that the council will continue to manage its financial position prudently. Our credit outlook holds for the next 24 months.

The Council’s Chief Financial Officer, Peter Garty, says the AA/A-1+ rating would continue to bring significant savings in the cost of borrowing as lenders offer lower interest rates to holders of high credit ratings.

It also provides more certainty of access to funds, as tough economic conditions continue to prevail around the world and lenders continue to exercise great caution.

ENDS

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