Hamilton City Council has maintained its favourable credit rating with global agency Fitch Ratings.
A credit rating is an independent assessment of a borrower’s (the Council’s) ability to meet interest and principal repayments on borrowings. The Council borrows money for large infrastructure projects and when it needs to spend significant amounts to build or maintain an important asset.
The Council’s Long and Short Term Local Currency Issuer Default Ratings (IDR) are AA- and F1+ respectively. An F1+ rating is the best quality grade, indicating exceptionally strong capacity to meet financial commitments. An AA rating places the Council as a high-quality investment grade organisation.
General Manager Corporate David Bryant says the rating is an endorsement of the Council’s processes, reporting and financial measures, as well as the actions taken by the Council to ensure everyday costs are met from everyday revenue.
“Fitch Ratings has also commented on our ‘stronger’ revenue robustness,” Mr Bryant says.
“The report noted our combination of revenue sources including rates, central government funding such as NZ Transport Agency subsidies, and development contributions driven through local investment, development activity and Hamilton’s above-average economic growth.
“We’re one of New Zealand’s fastest-growing cities. People want to live here, work here and do business here. Hamilton City Council is maintaining prudent financial management while supporting and enabling growth and the social and economic benefits this brings.”
Earlier in the year, Fitch indicated it may consider a lower rating, after a change in its methodology looked less favourable to councils in a high growth environment, like Hamilton, where debt is planned to increase to deliver growth infrastructure.
However, Fitch Ratings is satisfied with the Council’s risk profile and debt ratio and has left the rating unchanged.
Fitch Ratings compiles its report based on analysis of published reports and plans, national and regional socio-economic data and information provided by Council staff.