Madame Mayor & Council:
Earlier this morning, Standards & Poor’s Rating Services (S&P) reaffirmed Guelph’s credit rating at AA+ with a stable outlook. According to S&P’s Ratings Direct Research Update report the rating reflects Guelph’s, “very strong economic fundamentals, budgetary flexibility, exceptional liquidity position and low debt burden.” The credit rating also reflects S&P’s view that Guelph demonstrates strong financial management; as particularly evidenced by its very low level of contingent liabilities (e.g. post -employment benefit obligations), low debt levels and strong liquidity (i.e. ability to pay its obligations) which fare much better than many municipalities in Ontario.
Per regulatory reporting requirements, the City cannot post revised ratings until the credit rating agency releases them publicly which has now just occurred. Staff will bring forward a report next week providing further detail for Council’s information.
The current rating comes on the heels of two successive credit rating upgrades for the City of Guelph and is very welcome news that confirms that we continue to strengthen our financial position. For comparative purposes, the Province of Ontario’s current credit rating is AA– for long-term debt and A-1+ for short term credit with a recent downgrade to reflect a negative outlook so it must borrow at much higher rates and risks lower economic investment and development interest.
I personally wish to thank staff and senior management in the Finance & Enterprise service area as well as our other service area partners for their tremendous accomplishments here and over the last two years that is clearly achieving results. I also would like to compliment Council for its continued commitment to and support of sound financial policies and audit practices that have greatly contributed to this very strong rating.
As background, S&P (Standards & Poor’s website) has offices in 23 countries and a history that dates back more than 150 years and is known to investors worldwide as a leader of financial-market intelligence. Today, S&P strives to provide investors who want to make better informed investment decisions with market intelligence in the form of credit ratings, indices, investment research and risk evaluations and solutions.
Albert Horsman, Executive Director and CFO
Finance and Enterprise Services
City of Guelph