CODC obtains a long-term credit rating of AA with a stable outlook

With the uncertainty around the future delivery of water services and what they will cost, the Central Otago District Council has obtained a new credit rating from Fitch Ratings, which means we can borrow more if needed at a lower rate.

The credit rating was approved by the Council as a confidential item at the meeting on 26 March 2025 and has been released by Fitch Ratings.

In the just-released Fitch report, the Council has been given an ‘AA’ rating with a stable outlook, which was typical for Local Government.

Previously, the Council could borrow 175% of defined revenue. Based on this year’s revenue, this equates to $138 million borrowing capacity.

The new rating means the Council can now borrow up to 280% of its revenue from the Local Government Funding Agency, equating to $220m.

For the 2025/26 and 2026/27 financial years, the Council is anticipating it will require $131m in 2025/26 and $141m in 2026/27.

While the credit rating is unlikely to be needed in the next two financial years (bar a significant natural disaster), it is very close to the debt cap ($138m).

If water services delivery remains with the Council from 2029/30, the current debt headroom would be insufficient, and it would likely consistently breach current debt caps over three years.

To view the Fitch report, click HERE