City Reacts to Moody's Rating

Due to the change in the province’s financial outlook, Moody’s Investors Service has reaffirmed the City’s credit rating of Aa2 but has reduced the rating outlook from stable to negative.

“Today’s announcement, while disappointing, reaffirms for us that our disciplined approach to fiscal planning is in the best interests of the City,” explained Councillor Jonathan Galgay, Chair of the Finance and Administration Committee. “Our own credit rating is strong, and we have been assured that this decision will have minimal impact on our cost of borrowing.”

As stated by Moody’s in a press release issued Feb. 1, 2016, our rating decline is solely attributable to the fact that the province was downgraded, as the province is the guarantor on our debt.

“Moody’s confidence in us is based on our planning, operating surpluses and ability to pay our debts on time,” said Councillor Galgay, “so we must be cautious and continue to act in a fiscally responsible manner.”

The purpose of Moody's ratings are “to provide investors with a simple system of gradation by which future relative creditworthiness of securities may be gauged.”  The City’s Aa2 rating suggests that City debts are judged to be of high quality and are subject to very low credit risk, with a mid-range ranking. (www.moodys.com)

Fiscal Responsibility is one of six strategic directions adopted by the City of St. John’s in 2015 that identifies priorities and outlines goals. The City aims to make investments based on sound review and analysis and deliver on effective programs and services that enhance the livability of St. John’s.

Media Contact:
Kelly Maguire
Media Relations
City of St. John's
709-576-8491
kmaguire@stjohns.ca