Dunedin City Council – Media Release
10 December 2009
Standard & Poor’s Confirms DCC’s Stable Credit Rating
“Jim Harland, the Chief Executive of Dunedin City Council, has announced that the credit rating agency, Standard & Poor’s, has affirmed its AA- rating and ‘Stable’ outlook on the DCC.
The agency noted that Dunedin City Council’s credit quality is underpinned by its track record of strong management and fiscal discipline and, like all New Zealand local governments, benefits from minimum legal limitations in regard to increasing its property taxes.
In reviewing the Council’s long-term plan, Standard & Poor’s observed that although debt levels are forecast to increase upon the commencement of a number of new projects, they also expect that large shortfalls in capital spending will occur. Hence, the peak debt level may be lower and delayed.
It was further noted that if the Dunedin City Council did reach its forecast consolidated net-debt position of around 140% of operating revenue, it would likely put the rating under pressure.
In discussing the stable rating outlook for Dunedin, the Agency expects the Council will maintain its strong financial position, while the increasing debt burden ensures that there is little upside to Dunedin’s rating.”
Contact DCC on 477 4000.
Posted by Elizabeth Kerr