International credit rating agency S&P Global Ratings has reconfirmed the Greater Wellington Regional council’s ‘AA+’ long-term credit ratings. Both the council and its holdings company WRC Holdings have held an AA+ rating with a negative outlook.
Greater Wellington Regional Council chair Daran Ponter says the AA+ ratings are a renewed vote of confidence in the council’s efforts to make good decisions and deliver value for money for ratepayers.
“Greater Wellington continues to be one of only three councils to maintain an AA+ credit rating with S&P Global, reflecting our strong financial management and stability in a sector that has faced significant rising costs of borrowing, insurance, and inflation.”
S&P Global highlighted several positive factors that influenced Greater Wellington’s credit rating, including its prudent treasury policy and strong liquidity position.
“It was pleasing to also hear that the council’s continued focus on delivery to our Long-Term Plan (LTP) outcomes played a significant part in the rating this year, especially in a local government environment where many councils are cutting costs and not able to meet community deliverables,” says Cr Ponter.
The S&P report also acknowledges Greater Wellington’s fiscal responsibility and strong practices focusing on improving operating performance aided by rates increases and adherence to budgets.
However, there are ongoing challenges for the regional council to navigate.
“The negative outlook on the Local Government Institutional Framework measure remains a significant factor. S&P Global are expected to review this in the coming months and this review could result in credit downgrades across the sector, impacting Greater Wellington.”
Reduced operational surpluses were a contributor to the continued negative outlook.
“We have seen significant improvement with our bus services with a record number of passenger trips in the last year. We are working actively with our partners in rail to improve infrastructure and usher in a new generation of trains that will benefit people across the region and beyond, bringing further stability, performance and trust to our public transport network.”
Greater Wellington’s credit ratings are influenced by factors such as its level of debt, budgetary performance, and liquidity.
Holding a strong rating enables the Local Government Funding Agency, the major funder of councils, to access a wider pool of investors and potentially lower borrowing margins to benefit all New Zealand councils.
“In the face of significant changes and challenges, Greater Wellington is navigating change with partnership, collaboration, and an enduring commitment to our communities and Te Taiao – with an underpinning focus on good finance stewardship and delivery to the community,” adds Cr Ponter.
More information and the full S&P report can be found on the council’s website: Greater Wellington — Credit ratings (gw.govt.nz)