Outlooks On Seven New Zealand Local Governments Revised To Positive After Similar Sovereign Action; Ratings Affirmed

MELBOURNE (S&P Global Ratings) Feb. 1, 2019--S&P Global Ratings said today 
that it has revised the outlook on the 'AA' long-term local and foreign 
currency ratings of seven New Zealand local councils to positive from stable 
following a similar action on the New Zealand sovereign (see list). At the 
same time, we revised the rating outlook on Greater Wellington Regional Council
's subsidiary WRC Holdings Ltd. to positive from stable. We affirmed the 
short-term ratings on all entities at 'A-1+'.

Although the stand-alone credit profiles of these seven local councils are 
higher than New Zealand's, the ratings on the local councils are currently 
constrained by the foreign-currency long-term rating on the sovereign. We 
believe no New Zealand local government could withstand a default scenario 
better than the sovereign could, and that these local governments' credit 
metrics would deteriorate in line with those of the sovereign in the event of 
a distress scenario. 

The positive outlook on the New Zealand sovereign reflects our view that the 
general government budget could achieve a surplus over the next few years, 
which would provide the sovereign with additional resilience to macroeconomic 
or financial sector risks should they arise.

RATINGS LIST

Ratings Affirmed; CreditWatch/Outlook Action
                                        To                 From
Greater Wellington Regional Council
 Issuer Credit Rating                   AA/Positive/A-1+   AA/Stable/A-1+
 Commercial Paper                       A-1+               A-1+

Marlborough District Council
 Issuer Credit Rating                   AA/Positive/A-1+   AA/Stable/A-1+

New Plymouth District Council
 Issuer Credit Rating                   AA/Positive/A-1+   AA/Stable/A-1+
 Commercial Paper                       A-1+               A-1+

Palmerston North City Council
 Issuer Credit Rating                   AA/Positive/A-1+   AA/Stable/A-1+

Taupo District Council
 Issuer Credit Rating                   AA/Positive/A-1+   AA/Stable/A-1+
 Commercial Paper                       A-1+               A-1+

Wellington City Council
 Issuer Credit Rating                   AA/Positive/A-1+   AA/Stable/A-1+
 Senior Secured                         AA                 AA
 Commercial Paper                       A-1+               A-1+

Whangarei District Council
 Issuer Credit Rating                   AA/Positive/A-1+   AA/Stable/A-1+

WRC Holdings Ltd.
 Issuer Credit Rating
  Local Currency                        AA/Positive/A-1+   AA/Stable/A-1+
 Commercial Paper                       A-1+               A-1+
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