Waimakariri District Council scores AA credit rating for second consecutive year

Published: 02-May-2016

International credit ratings agency, Standard and Poor’s, have re-affirmed the Waimakariri District Council’s credit ratings as ‘AA/A-1+’ with a stable outlook.

‘AA’ refers to the Council’s long-term foreign and local currency creditworthiness and ‘A-1+’ refers to short-term issuer credit rating. A stable outlook reflects Standard and Poor’s expectation that, despite a significant capital works programme, the Council will maintain debt at a practicable level, while sustaining a strong level of liquidity.

This is the second year in a row that the Council has been issued with an AA rating from Standard and Poor’s. The AA rating equates the Council with New Zealand’s national rating – the ‘sovereign rating’. Standard and Poor’s do not rate any individual Council higher than the sovereign rating.

The Council’s was evaluated as having strong financial management, budgetary flexibility and liquidity. This was offset by an average District economy, a high debt burden and weaker budgetary performance brought about in part by earthquake recovery. The Standard and Poor’s report also referred to a high level of capital expenditure with the majority of that expenditure being for non-discretionary programmes such as sewer upgrades and earthquake infrastructure work  on property and land damaged in 2010/11. Those projects have a limited ability for postponement.

Mayor David Ayers says that receiving an AA rating two years in a row significantly strengthens the Council’s position in terms of establishing a strong financial platform. “When, in the future, loan-funding is considered to assist in completing major, capital intensive projects that may occur, , it is essential that the Council maintains a consistently strong fiscal performance so that interest rates will be at the lowest possible level”.

“The AA rating over two consecutive years from an internationally accredited agency such as Standard and Poor’s reinforces the Council’s reputation as fiscally sound, prudent and reliable”.

More information

Jeff Millward

Manager Finance & Business Support

Ph:         03 311 8900

Email:    jeff.millward@wmk.govt.nz