City of Windsor Financial Rating Affirmed at ‘AA’ by S&P

Standard & Poor’s (S&P) Ratings Services has affirmed its long-term issuer credit and senior unsecured debt ratings for the City of Windsor financial rating as ‘AA,’ citing the city’s “strong financial management, exceptional liquidity position, and strong budgetary performance”.

S&P also issued a stable outlook for the city, noting an expectation that, “in the next two years, Windsor’s tax-supported debt burden will continue to decline and that liquidity will remain exceptional. The Outlook further reflects an expectation of strong budgetary performance”

Windsor Mayor Drew Dilkens commented that “this independent rating reaffirms that City Council’s prudent fiscal policies are continuing to place the City in a strong financial position”.

S&P went on to recognize Windsor’s “focus on job creation and skills matching, as well as ongoing initiatives such as sports tourism to diversify the economy”.

Ratings Score Snapshot
City of Windsor — Ratings Score Snapshot
Key rating factors = Assessment
Institutional Framework = Very predictable and well-balanced
Economy = Strong
Financial Management = Strong
Budgetary Flexibility = Weak
Budgetary Performance = Strong
Liquidity = Exceptional
Debt Burden = Low
Contingent Liabilities = Low
Note: S&P Global Ratings’ ratings on local and regional governments are based on eight main rating factors listed in the table above. Section A of S&P Global Ratings’ “Methodology For Rating Non-U.S. Local And Regional Governments,” published on June 30, 2014, summarizes how the eight factors are combined to derive the foreign currency rating on the government.

Outlook

The stable outlook reflects our expectations that, in the next two years, Windsor’s tax-supported debt burden will continue to decline and that liquidity will remain exceptional. The outlook also reflects our expectation of strong budgetary performance, with after-capital deficits of less than 5% of adjusted total revenues.

We could take a positive rating action if budgetary flexibility were to strengthen materially through revenue enhancements, such as an increase in inflows of property tax revenues, fees, and other sources of revenue; and city administration continued its commitment to existing service levels and addresses its growing infrastructure needs, while maintaining focus on Windsor’s long-term financial sustainability.

We could take a negative rating action if weaker economic performance and operating pressures resulted in sustained after-capital deficits of more than 5% of adjusted total revenues, on average; and operating and capital needs affected reserve levels and medium-term funding availability, negatively affecting the city’s liquidity profile. However, we view this scenario as unlikely during the outlook horizon.

Read the full report here RatingsDirect_Research Update_1805287_Feb-23-2017_16_48.