Western Bay of Plenty District Council has retained its strong AA credit rating.
International credit rating agency Standard & Poor’s (S&P) says that despite a planned investment of $168 million in infrastructure projects during 2022-2024 (partly funded by debt) Council’s financial position is strong.
Council’s AA rating gives assurance to lenders that any debt carried comes with a very low credit risk and strong capacity to repay debt drawn down for significant infrastructure or unplanned events.
The score also allows Council to access lower interest rates from the Local Government Funding Agency.
Council’s Group Manager Finance and Technology Services, Kumaren Perumal says a strong and stable credit rating in the face of a large capital expenditure programme, and the impact of COVID-19, shows our investment approach is sound. “We’re in a great position and the rating provides confidence that if we need to borrow funds because of an unexpected event, we can do that.
“This credit rating result also provides our stakeholders and communities with assurance that Council has fiscal discipline and a prudent approach to financial management.”
The S&P report says Western Bay’s regional economy is looking similarly strong.
“Western Bay’s location and economic profile mean it will outperform domestic peers during the COVID-19 pandemic. This is because the pandemic has had a limited effect on the largest industries of agriculture, forestry, and fishing, which account for about 20 percent of economic output. … Western Bay is also less reliant on tourism than other councils.”
S&P is a global credit agency that gives out ratings based on factors such as finance, debt repayments and the economy. Their independent credit ratings indicate an organisation’s ability to take on and repay debt in the future.