Wellington continues strong S&P credit rating streak
4 December 2017
Wellington continues strong S&P credit rating streak, looks to future
International credit rating agency Standard & Poor's has this week reaffirmed Wellington City Council’s strong credit rating, with an AA rating for longer-term and an A-1+ rating for short-term.
The agency cites the Council’s forward-looking and prudent financial management as key factors supporting its continued strong rating.
The Council’s consistently high ratings from Standard & Poor’s put it in a strong position to absorb sudden shocks to its budget, such as earthquake recovery, and to better plan for future developments.
“Wellington City Council’s very strong financial management, institutional settings and exceptional budgetary flexibility support its ratings,” Standard & Poor’s RatingsDirect Research Update says.
“If we were to raise our rating on the sovereign, then we would likely raise our ratings on Wellington City Council because the Council’s standalone credit profile is currently stronger than our foreign currency rating on the sovereign.”
The research update also refers to the Council’s strong liquidity.
Wellington Mayor Justin Lester says financial prudence and planning for the future underpin the way the Council does its business.
“This tells us we are using ratepayer funds responsibly, and that we are on track for the city’s future. It is a credit to our highly capable financial team,” says the Mayor.
City Council Chief Executive Kevin Lavery says the high credit rating stands the Council in good stead for coming long-term projects because it means the Council has access to cheaper credit and that eases pressure on rates.
“Over the next 25 years, Wellington City’s population will increase by up to 80,000 people. To meet the challenges arising from this growth we’ll need to invest in better public transport, housing, a more effective road network, our resilience, and in arts and culture.”
“The Mayor and Council have been clear that we must continue to make Wellington not only more liveable, but fair, equitable, productive and loveable!”
The Standard & Poor’s research update also says: “Given the current strength of Wellington City Council’s stand-alone credit profile, we consider downward pressure on the rating to be unlikely.”