Favourable credit rating continues for Council

Published on 14 June 2016

14 June 2016

Mayor Annette Main welcomes the announcement by global rating agency Standard and Poor’s about the continuation of the AA- long-term credit rating for the Whanganui District Council.

Mayor Main says the rating is a vote of confidence in our Council’s prudent financial management, budget flexibility and transparency.

“The favourable rating also give additional confidence to Whanganui District Council’s financial lenders and will mean more investor interest, leading to lower interest costs to the Council.”

AA- is Standard and Poor’s fourth highest credit rating and is the same as the rating of New Zealand’s major banks. Standard and Poor’s announced the Council’s credit rating to the financial markets on Friday, June 10.

Standard and Poor’s has also given the Council a short-term issue rating of A-1+. This is the highest short-term credit rating, indicating the Council’s very strong capacity to meets its short-term obligations.

“While Standard and Poor’s has acknowledged the increase in the Council’s debt, which is due largely to the wastewater treatment plant upgrade and the capital expenditure from the June 2015 flooding event, it also commented on the benefits of preparing a 10-Year Plan which ensures we have a forward-looking approach to prudent financial management.

“The 10-Year Plan 2015-2025, which will be adopted on June 30, sees the Council focusing on reducing our overall debt levels once the wastewater treatment plant upgrade has been completed. Apart from the years the plant is being upgraded, for every other year of the plan the Council is budgeting on reducing its overall debt level.

“Standard and Poor’s has advised that its outlook for the Council is stable. This means it expects we will continue to operate within our forecasts, with the credit rating expected to remain in place for the next two years.”