Council holds on to AA- credit rating for fourth review

Waipā District Council has received its latest credit rating, and it's great news.

Fitch Ratings has assigned Waipā a local currency Issuer Default Rating (IDR) of 'AA-‘ with a stable outlook and a short-term local currency IDR of 'F1+'.

This is Council’s fourth review and in all four reviews the ratings have been retained.

Ken Morris, group manager of business support and chief financial officer at Waipā District Council, said credit ratings are important to council’s business to bring down the cost of borrowing.

“A positive re-rating will reduce interest costs, whereas a negative re-rating would have increased them, and maintaining a good rating keeps interest costs low. This means we save ratepayers tens of thousands of dollars in interest costs over the financial year,” he said.

The ratings are assigned based on Fitch's strict rating criteria for international local and regional governments, for the most part looking at risk profile and debt sustainability ratios.

“This is a significant endorsement of Waipā's financial strength and stability, and confirms council has sound financial management,” Morris said.

Hong Kong and Sydney-based analysts reviewed Waipā's historic and projected financial data and spoke to key members of Waipā's leadership and finance teams as part of their assessment. The final rating was signed off by an international rating committee.

“Our rating compares well with other councils across the country,” Morris adds, with Rotorua Lakes, Queenstown Lakes and Timaru district councils all sharing the same rating as Waipā.

The rating is subject to ongoing monitoring and an annual review by Fitch, and Morris said his team is focussed on maintaining Waipā's financial strength and sustainability.

Waipā’s next credit review is scheduled for mid-2022.