CITY OF CALGARY CREDIT RATING – S&P
The City of Calgary is pleased to announce that Standard & Poor’s (S&P) rating service has reaffirmed its ‘AA+’ long-term issuer credit and senior unsecured debt rating and ‘A-1+’ short-term rating on The City of Calgary.
The ratings reflect Standard & Poor’s view of:
• The City’s very strong financial management and budgetary performance,
• exceptional liquidity, and
• moderate debt levels compared with national and international peers.
S&P notes that The City’s budgetary flexibility remains strong, considering that Calgary’s demographic growth presents some challenges and pressure on expenditures. It says that although The City's budgetary flexibility and demographic growth remain strong, these factors are somewhat mitigated by moderate debt levels compared with national and international peers.
Although unemployment is expected to remain high in 2016, S&P believes that Calgary continues to be an important economic centre with higher disposable income per capita. Calgary’s fiscal performance is expected to remain strong, despite a large capital expenditure program. S&P also says that The City’s budgetary performance will remain strong over the 2016-2018 period if it continues to be prudent in operating spending growth, while continuing a solid strategy to levy taxes.
The agency expects The City will have limited ability to cut expenditures considering population trends in Calgary, which will somewhat restrict its budgetary flexibility. The agency says this will be constrained by a greater focus on large capital program expenditures and growth-related infrastructure requirements, which it believes, “The City has little ability to defer”.
S&P states that Calgary's financial management is very strong. “The management team is what we consider experienced and qualified to effectively enact fiscal policies, as well as effectively respond to external risks.” The agency acknowledges that The City prepares and Council approves four-year operating and capital budgets coinciding with Council terms, in addition to a five-year capital forecast.
The stable outlook reflects S&P’s view that The City will maintain its very strong financial management, with prudent use of debt over the coming years and will maintain exceptional liquidity.
Administration uses the rating services of Standard & Poor’s and Dominion Bond Rating Service as additional sources of performance measurement and accountability by presenting our numbers for review by credible third parties.
About Standard & Poor’s
Standard & Poor’s, a division of McGraw-Hill Financial (NYSE:MHFI), provides high-quality market intelligence in the form of credit ratings, research, and thought leadership. Standard & Poor’s is a full service credit rating agency with offices in 26 countries and has played a leading role for more than 150 years in providing investors with independent risk research and benchmarks.
The above content was copied from The City of Calgary's Chief Financial Officer's Department.
This content represents the personal views and opinions of the Councillor and should not be taken as a statement of policy of The City of Calgary. The inclusion of any external content does not imply endorsement by The City of Calgary.