Read S&P Global Ratings’ report on Guelph’s 2024 credit rating
Guelph, Ont., August 21, 2024 – For the third straight year, S&P Global Ratings continues to affirm the City of Guelph’s financial credit rating as AAA with a stable outlook, the agency’s highest possible rating. S&P’s report however does caution that the road ahead shows signs of downward rating pressure.
“In an environment of higher inflation, growing construction costs and other factors that can be outside the city’s control, I’m very pleased that we have been given a reaffirmed AAA rating,” says Cam Guthrie, mayor, City of Guelph. “I’m thankful to City staff for their efforts and ensuring we leverage our debt capacity to tackle the housing crisis and infrastructure demands.”
S&P Global Ratings is an independent company that analyzes municipalities and corporations around the world, evaluating their capacity to meet financial obligations. S&P’s consideration of Guelph found the City to have a strong local economy due in part to a broad manufacturing sector and a large public sector, including schools, hospitals, the University of Guelph and municipal administration. S&P also noted that economic growth is expected to continue, and unemployment is projected to remain low.
“Like many municipalities, Guelph is facing increased financial pressure to address housing supply and infrastructure demands, and the planned use of debt in the capital budget and forecast for these priorities does exceed S&P’s target threshold beyond this review’s forecast period of 2026,” says Tara Baker, City Treasurer and General Manager of Finance. “We are pleased that the City’s sound financial strategies and carefully considered fiscal planning have positioned the City so strongly, as we work to achieve the ambitious and necessary capital plan ahead needed to help the City meet our Future Guelph strategic goals.”
According to S&P’s report, “Guelph’s credit profile also benefits from strong management, as evidenced by generally good political consensus in passing budgets and effective revenue and expenditure planning practices,” notably highlighting the City’s first four-year budget adopted in late 2023. However, S&P cautioned that a lower rating is possible in the future “if significantly high capital expenditures are maintained in the long-term that result in persistent after-capital deficits and increased reliance on debt that exceeds their 30 per cent of operating revenues metric.”
About S&P Global Ratings
S&P Global Ratings, part of S&P Global Inc. (NYSE: SPGI), is the world’s leading provider of independent credit risk research. We publish more than a million credit ratings on debt issued by sovereign, municipal, corporate, and financial sector entities. With over 1,600 credit analysts in 27 countries, and more than 150 years’ experience of assessing credit risk, we offer a unique combination of global coverage and local insight. Our research and opinions about relative credit risk provide market participants with information that helps to support the growth of transparent, liquid debt markets worldwide.
Media contact
Kyle Hayward, Communications Officer
Strategic Communications and Community Engagement
City of Guelph
226-332-5569
[email protected]