Council retains AA- credit rating

Fitch Ratings, one of the world’s top credit rating agencies, has confirmed Waipā’s Issuer Default Rating (IDR) of 'AA-' with a stable outlook and short-term local currency IDR of 'F1+'. This is the Council’s third review and in all three reviews the ratings have been retained.

Deputy chief executive Ken Morris said credit ratings are important because a good rating brings down the cost of borrowing. The ratings are assigned based on Fitch's strict rating criteria for international local and regional governments, for the most part looking at profiles and debt sustainability ratios.

“A good rating gives investors confidence because there is lesser risk of default. A favourable re-rating will reduce interest costs and an unfavourable re-rating will increase them. A good credit rating will save ratepayers tens of thousands of dollars in interest costs,” he said.

“The affirmation at AA- is a continuing endorsement of Waipā’s financial strength and stability, together with stable governance and sound financial management.”

In the past few days Rotorua Lakes Council has had its credit rating affirmed at AA-. Selwyn District Council has been affirmed at AA+.

Tauranga City Council, rated by another credit agency, has recently been downgraded. The change is likely to see the Council pay an extra $100,000 to $150,000 in annual interest costs.

Waipā’s next credit review is scheduled for mid-2021.