Credit-rating agency Standard & Poor’s today lowered Porirua City’s credit rating by one notch, which has moved from AA to AA-.
Although New Zealand’s local government ratings rank as the third-highest in the world globally, a level of uncertainty around water reform, councils’ limited revenue streams and high infrastructure responsibilities have led generally to downward pressure on ratings for councils across the country.
New Zealand councils’ debt levels have been increasing and the country as a whole is facing escalating costs and inflationary pressures.
For each city, the following are considered to determine a rating: institutional framework, economy, management framework, liquidity, budgets and debt.
The last review of Porirua City was in July 2023. Since then, there have been increases in debt levels, created largely by increases in capital spending in three waters.
The Council’s decision to defer rates increases during Covid-19 also contributed to the increased debt level.
“Our credit rating is still very high, said Mayor Anita Baker. “What it means in real terms, is that there is likely to be a small increase in interest on any new borrowing. It does not change the overall direction of our Long -term Plan or rates for next year.”
“Our Council will continue to deliver services and infrastructure for the city, while also responding to the pressures councils across the country are experiencing.”
21 Jul 2024
