York Region’s credit rating has increased from AA+ to AAA, which marks its first increase from S&P Global Ratings in seven years.
The rating is the highest the credit rating agency can give to an issuer and is awarded for investment-grade debt having a high level of creditworthiness with the strongest capacity to repay investors.
“Credit ratings are forward-looking opinions about the ability and willingness of debt issuers, like corporations or governments, to meet their financial obligations on time and in full,” S&P explains. “They provide a common and transparent global language for investors and other market participants, corporations and governments, and are one of many inputs they can consider as part of their decision-making processes.”
S&P upgraded York’s rating for several reasons, including extremely strong finances and steady debt levels combined with lower interest costs as a percentage of operating revenue.
“In recent years, York Region’s prudent fiscal strategies surrounding capital asset investments and spending have resulted in large asset replacement reserves and lower debt issuance,” says Vaughan Mayor Maurizio Bevilacqua, Chair of Finance and Administration.
S&P expects York’s economy will continue to support revenue-growth, resulting in strong budgetary surpluses to help fund the capital plan. It also expects the Region will continue to adapt the capital plan and related costs to align with fluctuations in population growth and development charge collections.
Additionally, it expects the Region will continue to limit new debt issuance to fund growth-related spending and maintain net debt below its 2017 peak of $2.9 billion. Finally, it expects interest costs will remain stable relative to revenue.
“Maintaining a high credit rating is a Council priority and is in alignment with the Region’s Fiscal Strategy,” says Region Chairman and CEO Wayne Emmerson. “First adopted by Regional Council in 2014 and updated annually, the long-term strategy aims to ensure both financial sustainability and fairness of the Region’s investments, programs and services over time and generations.”
