City of Peterborough credit rating upgraded to “AA+”

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Peterborough, ON – Standard & Poor’s has upgraded the City of Peterborough’s credit rating to “AA+” from “AA” through its review of the institutional framework assessment for Canadian municipalities, reflecting their extremely predictable and supportive outlook. 

The ”AA+” rating is the second highest rating on Standard & Poor’s credit rating scale. 

The rating is an indication of the City of Peterborough’s strong, stable financial position and the fiscal management of the organization. 

When Standard & Poor’s released its credit ratings last winter, it cited Peterborough’s diversified economy and prudent financial management. 

“Bolstered by its diversified economy and prudent financial management, the city has weathered the difficult operating environment during the pandemic,” the agency stated. 

Looking across the Canadian municipal sector, Standard & Poor’s announced last week that it was raising the ratings of 21 entities, including the City of Peterborough. 

“Canadian municipalities have demonstrated resilient budgetary performance over the years, including during the dual economic and fiscal shocks of the 2008 financial crisis and more recently, the COVID-19 pandemic,” Standard & Poor’s stated in its rating sheet. “In times of stress, the municipalities have received exceptional support from senior levels of government. 

“The requirement to produce balanced budgets while keeping pace with service and expenditure responsibilities, coupled with reduced pandemic-related grants, will likely lead to lower operating surpluses that are more in line with historical levels in the next two years. Nevertheless, we do not believe that a modest weakening in budgetary results will significantly affect Canadian municipalities’ creditworthiness in the next two years.” 

Among the reasons and expectations for the City of Peterborough’s strong credit rating, Standard & Poor’s has cited: 

  • Prudent financial management and supportive institutions; 

  • Peterborough’s stable and diversified economy will anchor the city’s recovery from the effects of the COVID-19 pandemic, despite some obstacles related to its less-favorable socioeconomic profile; 

  • The city’s strong financial management will help to maintain stability in the medium term; 

  • A very predictable and well-balanced local and regional government framework supports the rating; 

  • Peterborough’s debt burden will remain manageable despite an increasing capital program; 

  • The city will maintain robust operating surpluses and after-capital deficits will remain less than 5% of total revenue, on average; 

  • Despite modest new debt issuances and an increasing capital plan, tax-supported debt will stay manageable over the forecast horizon at an average of 46% of operating revenues; and  

  • Liquidity will be a key strength. 

Standard & Poor’s is a financial services company that offers services including credit ratings, data analysis and equity research to both the private and public sectors worldwide.