Council's S&P Global rating revised for improving liquidity

Published on 01 November 2022

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International credit-rating agency S&P Global has assigned Upper Hutt City Council an A+/Stable/A-1 rating, improving on the rating issued in 2021. 

In the report, S&P Global says “the stable outlook reflects our expectation that Upper Hutt will prudently manage its liquidity and debt as it delivers a very large capital expenditure program. Debt will rise sharply but remain within the thresholds for the 'A+' long-term rating.” 

This annual credit rating exercise was introduced in 2021 as part of our Long Term Plan work and an updated Treasury Management Policy. 

The 2022 report is available to download on this page. In its report, S&P Global says: 

  • Upper Hutt's internal liquidity has strengthened thanks to a higher balance of cash and cash equivalents. While its debt-service coverage ratio is likely to be volatile, by our measures, we expect the council to manage liquidity prudently. 

  • Upper Hutt will record very large after-capital-account deficits over the next three years as it ramps up investment in new community facilities and other infrastructure. This will cause its debt burden to rise rapidly. 

  • The council has reprofiled some capital projects and its infrastructure spending, while elevated compared with peers, will likely be tempered by market capacity constraints. 

  • We therefore revised our outlook on the long-term ratings on Upper Hutt to stable from negative and affirmed our 'A+/A-1' ratings on the council.