164 01 March 2017
Finance
and Performance Committee
31 January 2017
File: (17/113)
Report no: FPC2017/1/31
Standard and Poor's Credit Rating
Purpose of Report
1. The purpose of this report is to inform the Committee that on 7 September 2016, Standard and Poor’s Global Ratings affirmed Council’s credit rating as AA long term with “stable” outlook, and A-1+ short term.
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That the report be noted and received. |
Background
2. Standard and Poor’s annually review Council’s credit rating. The most recent review was completed in August 2016.
3. Standard and Poor’s found that Council has:
a. very strong financial management;
b. strong budgetary flexibility;
c. strong liquidity; and
d. low contingent liabilities.
4. These factors combined with the extremely predictable and supportive institutional framework in which New Zealand local government operates, resulted in the long term credit rating for Hutt City Council being classified as “AA/Stable”.
5. Partially offsetting the above strengths are Hutt’s average economy and budgetary performance, and moderate debt burden.
6. The stable outlook reflects Standard and Poor’s expectation that debt levels will be maintained well below 120% of operating revenue, while sustaining a strong liquidity position.
7. The rating received by Council is the same as the New Zealand sovereign rating so any upward movement of the rating is restricted by the sovereign rating.
8. The detailed report from Standard and Poor’s is attached as Appendix 1 to the report.
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No. |
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1View |
Standard & Poor's Credit Rating Review 2016 |
176 |
Author: Brent Kibblewhite
Chief Financial Officer
Approved By: Tony Stallinger
Chief Executive