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Council disappointed by credit rating downgrade
Auckland City Council
Media release
16 December 2009
Council disappointed by credit rating downgrade
Auckland City Council finance general manager Andrew McKenzie says he is disappointed by Standard and Poor’s decision today to downgrade the council’s credit rating.
The rating has moved from ‘AA / A-1+’ to ‘AA- / A-1+,’ with a stable outlook.
The rating reflects Standard & Poor’s assessment of the credit quality of the new Auckland Council, which on 1 November 2010 will be created from the merger of the Auckland region’s eight existing territorial local authorities.
Andrew McKenzie says the downgrade by Standard and Poor’s reflects a poor understanding of the New Zealand local authority sector.
“The new council will be subject to the same legislative controls to operate in a financially prudent manner as Auckland City Council, which has a strong cash operating surplus and low-risk operations. In addition, the new council retains the ability to rate and its rating base will be almost three times the size of Auckland City Council’s.”
“In New Zealand, the market has a better understanding of the strong credit features supporting the local government sector here.”
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