Council credit rating maintained

International credit rating agency Standard and Poor’s has reaffirmed Christchurch City Council’s AA financial rating.

The rating keeps Christchurch City Council among the highest-rated local authorities in New Zealand. The other AA-rated local authorities are Auckland Council, Wellington City Council, Greater Wellington Regional Council, New Plymouth District Council and Hutt City Council.

Standard and Poor’s says that the Council remains on negative outlook because of the lack of insurance available to cover Council assets, a negative global outlook and the agency’s view that there is uncertainty in Christchurch’s local economy, around the speed with which the rebuild can progress and the exact extent of Central Government contribution to the rebuild.

The agency also praised the Council’s financial management as a “very positive rating factor”. It says: “…the Council has demonstrated significant responsiveness to events. This includes implementing recovery efforts and back-up plans, and a five-year earthquake rates levy to support the Council’s weaker budgetary position.”.

General Manager Corporate Services Paul Anderson says this is a good result for the city.

The outcome is a direct result of the Council's strong financial management and Government's strong support to date.

“The Council’s involvement in the newly established Local Government Funding Agency was also viewed positively by the ratings agency, which it expected would improve the city’s liquidity.

“This is a good outcome given the events of the past year. The Council continues to keep tight control on finances as the city works toward recovery.”

Christchurch Mayor Bob Parker says, “A positive affirmation of Council management’s approach to handling the extraordinary financial pressures and uncertainties around us at this testing time is reassuring for ratepayers. My congratulations to the CEO and his finance team.

“It is also pleasing to note that the Council’s leadership role in setting up the Local Government Funding Authority is already starting to produce a positive effect.”