Midhurst/ December 21, 2016 – S&P Global Ratings has affirmed the County of Simcoe's very strong AA long-term issuer credit rating for 2016. The rating reflects the County's exceptional liquidity, very low debt burden and contingent liabilities, and strong budgetary performance. The rating also reflects S&P Global Ratings' opinion of the very predictable and well-balanced government framework and the County's sound financial management.
"We understand that our residents face many financial constraints and it's important to them to know that their tax dollars are being managed responsibly," said Warden Gerry Marshall. "We continue to receive strong credit ratings based on our robust financial management policies and strong budgetary performance. Our position of strength allows us to make strategic investments in initiatives such as transit, new infrastructure, education and social housing that benefit our communities, enhance our services and contribute to the well-being of our residents."
The rating affirmation was released December 5, 2016, and reflects S&P Global Ratings' expectations that, in the next two years, the County of Simcoe's liquidity will remain exceptional, tax-supported debt will stay below 30% of projected consolidated operating revenues, and budgetary performance will remain strong.
The report also notes the County's political and managerial strength is demonstrated by generally good political consensus in passing budgets without major amendments or delays. In addition, the report states that the County has a robust set of financial policies, provides transparent, easy-to-access disclosure to pertinent information, and prepares detailed operating and capital budgets.
Highlights from S&P Global Ratings report
- At the end of 2015, the county's tax-supported debt declined to C$52.3 million or 18% of consolidated operating revenues (all figures S&P Global Ratings-adjusted), from 21% in 2014, which, according to S&P is considered very low debt burden
- The County's liquidity position is exceptional and a key credit strength. S&P Global Ratings estimates that monthly adjusted free cash and liquid assets will average C$28 million in 2017, which would be enough to cover more than 8 times the forecasted debt service payable in that year. S&P Global Ratings expects the County's coverage ratio to continue exceeding 100% in the next two years
- The County posting an operating surplus of 10.7% of operating revenues and a surplus after capital accounts of 3.6% of total revenues
- The County's economy generated an average GDP per above US$38,000 in 2013-2015 but likely somewhat less than the provincial average of about US$45,500. S&P Global Ratings views the County's economy as strong and fairly stable, although less diversified than that of its peers
About S&P Global Ratings
With 26 offices around the world and a history that dates back more than 150 years, S&P Global Ratings provides high-quality market intelligence in the form of credit ratings, research, and thought leadership.
About the County of Simcoe
County of Simcoe is composed of sixteen member municipalities and provides crucial public services to County residents in addition to providing paramedic and social services to the separated cities of Barrie and Orillia. Visit our website at simcoe.ca.
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