Credit rating announcement supports Aberdeen City Council ambitions
Aberdeen City Council has become the first local authority in Scotland to be assigned an issuer credit rating as it prepares for the next stage of an ambitious capital programme.
Moody’s Investors Service confirmed an Aa2 rating on Friday (7 October 2016).
The assignment of the credit rating will allow Aberdeen City Council to consider innovative new funding mechanisms, including access to debt capital markets.
The announcement reinforces Aberdeen City Council’s strength as an organisation and follows a rigorous process of assessment and risk analysis which tested the authority’s financial management and corporate governance.
In announcing the Aa2 issuer rating, Moody’s Investors Service said its decision reflected Aberdeen City Council’s “strong institutional framework” as well as a “strong track record of operating performance” and added “the Council has demonstrated a solid financial record for the last five years maintaining a net surplus against budget for each year”. The Moody’s statement also noted Aberdeen’s “wealthy local economy, albeit dependent on key industries”.
Aberdeen City Council Leader Councillor Jennifer Laing said: “Being assigned a credit rating, a first for a Scottish local authority, is a vital step forward for us as we explore options to fund what is a comprehensive capital programme designed to support the city’s growth and diversification during a crucial period for Aberdeen.
“We are committed to investing in a bright and prosperous future for the people of Aberdeen and the businesses in our city, with transformation already well underway. Today’s announcement is another significant step towards realising our ambitions.”
Major projects included in the long term capital programme include the comprehensive City Centre Masterplan, school and housing developments, roads construction, digital enhancements and a variety of key projects designed to act as catalysts for economic growth.
Finance, Policy and Resources committee convener Councillor Willie Young said: “This process and our achievement in gaining an Aa2 credit rating serves as a very positive independent assessment of Aberdeen City Council’s stability and strength.
“It is a clear demonstration of confidence in the financial management and controls we have in place, which provide us with the solid foundations we need as we build for the future.”
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