06 November 2019
LGFA credit ratings affirmed by Fitch Ratings at AA/AA+
Fitch Ratings has affirmed the credit ratings of New Zealand Local Government Funding Agency at ‘AA’/ ‘AA+’ with a stable outlook
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' legal status, control and oversight, 'Strong' level of historical financial support, and '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 11 October 2019, it was guaranteed by 53 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 other 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 (JSLG).
Please see the following link for further information
Released on behalf of NZ Local Government Funding Agency Limited by Mark Butcher, Chief Executive.