Fitch Ratings, a global leader in credit ratings and research, has affirmed Hamilton City Council’s high ranking in international credit ratings.
The ratings, released on Friday evening, reflect a strong institutional framework for the Council, stable financial performance and strong population and employment growth in Hamilton.
The Council’s Long and Short Term Local Currency Issuer Default Ratings (IDR) are AA- and F1+ respectively. F1 ratings are the highest for short-term credit quality, indicating the strongest intrinsic capacity for timely payment of financial commitments, while the added “+” denotes any exceptionally strong credit feature. ‘AA’ ratings denote expectations of very low default risk and indicate very strong capacity for payment of financial commitments.
Chief Executive Richard Briggs says the Fitch Ratings are an endorsement of the Council’s processes, reporting and financial measures, as well as the actions taken by the Council to ensure everyday costs will be met from everyday revenue.
“Our financial review process identified we needed to develop new financial measures and stop borrowing to pay for the running costs of the city. The Council has addressed this through our 10-Year Plan, and these actions have been acknowledged in the Fitch summary,” Mr Briggs says.
“Excellent credit ratings not only endorse the work the Council and my staff have done, they also directly benefit ratepayers as these ratings mean we continue to receive favourable interest rates.”
Mr Briggs says the Council’s $2 billion investment in Hamilton through the 10-Year Plan brings increased debt and the Fitch report echoes the Council’s view that operational savings, forecast growth and careful management of operational expenditure will need to be monitored as this investment is delivered.
The Fitch report calculates an improved operating margin for the city in the last financial year which compares favourably against many other New Zealand councils and international peers. It also highlighted Hamilton’s strong population and employment growth, with the city’s unemployment rate dropping from 6.0% to 5.3% against the previous financial year.