04 November 2020
LGFA credit ratings affirmed by Fitch Ratings at AA/AA+ with Outlook Positive/Stable
Fitch Ratings has affirmed the credit ratings of New Zealand Local Government Funding Agency at ‘AA’/ ‘AA+’ with a positive outlook (foreign currency) and stable outlook (domestic currency). See Attached
Fitch has categorised LGFA as a government-related entity (GRE) under the Government-Related Entities Rating Criteria. This reflects their appraisal of LGFA's 'Very Strong' status regarding ownership and control, 'Strong' level of support, 'Strong' socio-political and 'Very Strong' financial implications of a potential default. Consequently Fitch has equalised LGFA's ratings with those of the New Zealand sovereign (AA/AA+/Stable/F1+), which is a shareholder, liquidity provider and derivative counterparty to the company.
LGFA remains the only dedicated financing vehicle for the New Zealand local government sector and, as of 30 October 2020, it was guaranteed by 58 local councils covering the majority of the country's population. Fitch note that the affirmation also takes into account the strong underlying credit profiles and general asset quality of LGFA's council shareholders and borrowers, which operate within a stable institutional framework and provide full support for LGFA's debt obligations through joint and several liability guarantees.
Please see the following link for further information
Released on behalf of NZ Local Government Funding Agency Limited by Mark Butcher, Chief Executive.
Telephone +64 4 974 6744