06th September 2024

Credit-rating agency Standard & Poor’s has today downgraded Wellington City Council’s long-term issuer credit rating from AA+ to AA, while affirming the A-1+ short term issuer credit rating, continuing a trend of downgrades for local authorities across the motu.

The City Council’s Chief Strategy and Finance Officer, Andrea Reeves, says the downgrade will have no impact on the cost of borrowing for Wellington City which, like other councils, accesses interest rates on its borrowing that are lower than what banks or other lenders can offer, through the Local Government Funding Agency.

S&P has also retained Wellington City Council on a negative outlook, pointing to a downside scenario where financial management weakens through lower revenue or further expense increases than forecast.

The S&P report says the rationale for the downgrade was as follows: “We downgraded Wellington City Council because its financial outcomes are weaker than we previously expected. The Council’s additions to its capex program in its 2024-34 long-term plan will weigh on its fiscal performance over the next three years.”

Mayor Tory Whanau says the rating downgrade was expected – and reflects the huge pressures facing councils and ratepayers around the country

Mayor Whanau says Wellington City Council must balance the need to continue delivering services for the city while also positively dealing with the effects of the economic downturn, inflation, high interest costs, soaring insurance costs, seismic-strengthening projects including Te Matapihi and the Town Hall, and the need to upgrade the city’s water infrastructure.

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