Horowhenua District Council retains A+ credit rating

Published on 16 April 2019

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S&P Global has affirmed Horowhenua District Council’s A+ credit rating for long-term foreign currency and local currency.

S&P Global is an internationally recognised organisation, and the credit rating process takes into account whether the organisation can service its debt.

The report is compiled following an assessment of Council’s financial policies and practices, budgetary performance, liquidity, debt burden and revenue drivers.

“It is reassuring to have the ratings affirmed as it affects Council’s ability to secure lower interest rates thereby making significant savings,” says Horowhenua District Council Chief Financial Officer, Doug Law.

The report states that Council’s forward-looking approach to financial management, ongoing economic growth in the district, and New Zealand’s excellent institutional framework support its rating.

Mr Law says the independent analysis by S&P Global should reassure ratepayers that Council is financially well managed and the district is on the right track. 

The report states that the district’s economy is growing well, with 3.9 per cent GDP growth during the year ended 30 September 2018 compared with the national average of 2.7 per cent growth, backed by strong construction and dairy sectors.

In addition, it highlights the potential for the Wellington Northern Corridor Expressway to accelerate economic development and population growth in the future by cutting travel times and freight costs between Horowhenua and Wellington, making the district more desirable and productive.

The report says Council’s spending and account deficits are expected to remain high over the next few years as it invests in infrastructure to meet current and future needs, although a broadening rating base as the district’s population grows will help to moderate debt.

“Council is planning ahead to make sure our district is prepared for the forecast growth, so we can capture the opportunities it offers to ensure a prosperous future for our community,” said Growth Response Manager, Daniel Haigh.

Other key points include:

  • Operating surpluses are expected to remain strong at about 19.6 per cent of operating revenue over the next three years
  • Strong budgetary flexibility
  • The political environment is unlikely to weaken financial governance
  • Local elections this year are not expected to change Council’s direction.