City of Hamilton ‘AA+’ credit rating affirmed - Outlook is stable

HAMILTON, ON – S&P Global Ratings (S&P) released its most recent Research Update this week, affirming its ‘AA+’ long-term issuer credit and debt ratings for the City of Hamilton with a stable outlook.

S&P recently realigned their ratings review and surveillance schedule resulting in the release of this Research Update just five months after the previous Research Update, which was released in June.

The ‘AA+’ credit rating and stable outlook reflect the City’s high rankings in almost all categories, including:

• Institutional framework – Very predictable and well balanced
• Economy – Very strong
• Financial management – Strong
• Budgetary flexibility – Average
• Budgetary performance – Strong
• Liquidity – Exceptional
• Debt burden – Very low
• Contingent liabilities – Very low

"I am extremely pleased with the recent update from S&P Global Ratings that the City of Hamilton rating is once again AA+. We are on the right track. We continue to benefit from strong, robust financial management, allowing us to keep tax increases low while investing in programs, services and infrastructure. This acknowledgment is encouraging and confirms that Hamilton continues to be a thriving municipality.” - Mayor Fred Eisenberger

The City’s budgetary flexibility continues to be rated as Average due to the impacts of provincially mandated service levels, labour contracts, inflation, challenges deferring capital spending due to aging infrastructure and infrastructure deficit.

Other highlights include:

• The City operates in a very predictable, well-balanced local and regional government framework, which lends to its stability
• Financial management is considered strong due to fiscal prudence, e.g. cost-cutting where possible, including $12M from the City’s 2017 budget
• Strong budgetary performance; the city has mild, yet steady, assessment growth
• Exceptionally high internal liquidity levels complemented by very robust internal cash flow generation reflected in its very high operating surpluses and satisfactory access to external liquidity for refinancing needs
• Very low debt burden and interest costs are expected to remain very modest
• Contingent liabilities such as ownership of businesses, standard employee benefits and landfill post-closure liabilities are modest and do not present significant risks to the City’s debt burden or liquidity

The research update findings are consistent with the City’s continued focus on greater financial acumen through multi-year business planning, business cases with identified good value for money, risks and outcomes, vendor management and standardized project management processes.

Additional resources

• S&P Global Ratings (S&P) Research Update - November 2017 - City of Hamilton (PDF,  287 KB)