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Greater Wellington Reissued Strong Financial Ratings Despite Revised ‘Negative Outlook’

International credit rating agency, Standard and Poor’s (S&P) has reissued Greater Wellington’s 'AA+' long-term credit ratings, while the regional council’s ratings outlook has been revised, changing from ‘stable’ to ‘negative’.

Cr Ponter says the AA+ ratings are a renewed vote of confidence in Greater Wellington’s efforts to deliver value for money for ratepayers, while the revised outlook reflects rising the rising costs of borrowing, insurance, and inflation.

“In 2023, Greater Wellington was among five councils that had achieved and maintained these ratings, we are now among only three.

“Like many other local authorities, however, we are managing significant cost increases for materials and labour, impacting our capital construction programme, which includes works on multimillion-dollar flood defences for the Hutt Valley, Cr Ponter says.

On revising the rating outlook for Greater Wellington and 14 other councils, S&P’s report commented that “sector debt has risen rapidly since the start of the pandemic as councils grapple with large infrastructure needs and persistent inflation in operating and capital budgets.”

Greater Wellington’s credit ratings are also influenced by factors such as its level of debt, budgetary performance, and liquidity.

The S&P report also acknowledged Greater Wellington’s fiscal responsibility and strong practices stating, “we assess Greater Wellington's financial management to be very strong in a global context”.

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Holding a strong rating also enables the Local Government Funding Agency, the major funder of councils, to access a wider pool of investors and potentially lower borrowing margins to benefit all New Zealand councils.

“Greater Wellington will continue to deliver a high standard of financial management and work with the Government and the Local Government Funding Agency to secure better funding arrangements,” Cr Ponter says.

More information and the full S&P report can be found on the Greater Wellington website: Greater Wellington — Credit ratings (gw.govt.nz)

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