Credit rating agency Standard & Poor’s (S&P) has published its research update for Tauranga City Council following its annual credit rating review. Tauranga City Council’s credit ratings have been upgraded one notch, from A+ to AA- (long-term) and from A-1 to A-1+ (short-term) with a ‘stable’ outlook.
This upgrade recognises that the debt-to-revenue ratio has been maintained at a stable level over recent years, and reflects the expectation that revenue growth will support this stability in future years.
S&P noted Council’s robust financial management, underpinned with prudent policies on borrowing and liquidity. This supported the new ratings, along with New Zealand’s consistently predictable and supportive institutional framework.
Other factors supporting the upgrade include Council’s budgetary flexibility and budgetary performance which generated consistently high operating surpluses over the review period; and the recent additional subsidy levels agreed with NZTA for our capital delivery programme.
S&P also took into account Council’s successful bid for government funding through the Housing Infrastructure Fund – for up to 10 years on an interest-free basis – which will lessen interest expense.
Tauranga City Council credit rating reports