Council retains positive credit rating
4 April 2019
Rotorua Lakes Council has retained its AA- rating with international credit rating agency Fitch.
The council has retained this rating since 2016 when its finances were first tested by Fitch as another check to ensure effective financial management.
In a statement announcing Rotorua Lakes Council’s 2019 rating, Fitch states: “The ratings reflect New Zealand’s strong institutional framework for local and regional councils, the council’s stable fiscal performance and debt metrics over recent years, the strength of Rotorua’s tourism-led economy and moderate future population growth.
“While the council’s adopted 2018-28 Long-term Plan (LTP) details a substantial capital expenditure programme, Fitch believes that the Council’s debt metrics are unlikely to deteriorate in the future as it seeks to limit the level of debt-funded, capital expenditure via higher rates revenue and use of operating surpluses.”
Council’s Chief Financial Officer Thomas Collē says it’s a pleasing result.
“This is a good rating and given the challenges we have faced during the past few years it’s very pleasing to have retained our rating.
“Fitch is one of the three big international rating firms and has a large base to compare us against. In their view our 2018-28 Long-term Plan and financial strategy are sustainable and they have confidence we can deliver on our long-term plan while still living within the financial parameters we set.”
Mayor Steve Chadwick says the result is “fantastic news”.
“This should give the community and investors continued confidence in Council’s direction and strong financial management.
“Fitch takes a very in-depth, comprehensive and critical look at Council in determining these ratings and also considers the wider Rotorua picture including growth, the local economy and socio-economic factors,” the Mayor says.
“Retaining AA-, which is a very good rating, means they have confidence in Council’s ability to stick to our long-term plan and deliver what we’ve planned, within the prudent financial framework we have set.
See the Fitch Ratings release regarding this HERE on the Fitch website.