Credit rating agency Standard & Poor's has raised its ratings on Watercare from A/A-1 to AA-/A-1+. Debt issued by Watercare and guaranteed by its shareholder, the Auckland Council, is rated AA.
“We believe that the amalgamation of Auckland’s regional councils into the single Auckland Council has improved the efficiency and timeliness of the council’s response to issues at Watercare”, said Philip Grundy, Standard & Poor’s credit analyst.
“Now that we have observed the interface, systems, and processes in place between Watercare and its council owner, we have revised our view of Watercare’s link to government to ‘very strong’ from strong”. Under our criteria for rating government-related entities, a ‘very strong’ link to government, combined with what we consider to be Watercare’s ‘critical’ role, equates to an ‘extremely high’ likelihood of extraordinary support being provided and underpins an uplift in the credit rating above the company’s standalone credit profile.”
Click to read the announcement from Standard & Poor's.