High Credit Rating Confirmed for City of Edmonton
October 16, 2012
AA rating reflects good management, stable outlook
Rating agency DBRS has confirmed credit ratings of R-1 (high) and AA (high) for the City of Edmonton.
The agency says Edmonton continues to benefit from a solid economic growth outlook, very healthy cash availability at the end of 2011 of $1.2 billion, and consistently sound operating performance. The Alberta government’s strong financial position has also been a plus for Edmonton.
“We are pleased to see that the City maintains its high standing with credit rating agencies such as DBRS,” says Chief Financial Officer Lorna Rosen. “It is important recognition at the national and global level of our prudent fiscal stewardship, and another reminder of the importance of our drive for financial sustainability on citizens’ behalf.”
DBRS’ rating is unchanged from last year. Some details of the rating include:
- Prudent management and consistent balanced budgets
- Liquidity (cash and investments) providing ample cushion against unexpected events
- Strong economic growth benefiting from proximity to oilsands
Potential challenges include:
- Rising capital expenses driven by population growth
- Potential volatility of the energy sector
- Uncertainty in the investment markets (though the City’s priority on revenue stability is noted)
DBRS notes that rising capital spending in 2011 has reduced the City’s liquidity position somewhat. However, the agency’s concerns a year ago regarding Edmonton’s capital debt levels have been eased with the recognition that a portion of the debt is underwritten by stable federal fuel tax funding.
Credit rating agency reports do not affect the City of Edmonton’s borrowing costs or access to capital. The City borrows through the Alberta Capital Financing Authority, and maintains debt levels consistent with provincial and internal policies.
For more information:
|Title||Chief Financial Officer & Treasurer|