Research Update: Tasman District Council Outlook Revised To Negative On Rising Capital Expenditure And Dam Costs; Ratings Affirmed

Tasman's elevated capital expenditure will likely lead to wider after-capital-account deficits and a higher debt burden during the next few years. The council will also need to fund the majority of construction cost overruns related to Waimea Community Dam. We are revising our outlook to negative from stable, primarily reflecting downside risks to debt and liquidity from Tasman's exposure to the dam project. We are affirming our 'AA/A-1+' ratings on Tasman. Tasman's solid financial management, exceptional liquidity coverage, and New Zealand's excellent institutional settings continue to support the ratings. On Oct. 30, 2020, S&P Global Ratings revised to negative its outlook on the long-term issuer credit ratings on Tasman District Council, a New Zealand local government. At the same time,

...- Tasman's elevated capital expenditure will likely lead to wider after-capital-account deficits and a higher debt burden during the next few years. The council will also need to fund the majority of construction cost overruns related to Waimea Community Dam. - We are revising our outlook to negative from stable, primarily reflecting downside risks to debt and liquidity from Tasman's exposure to the dam project. - We are affirming our '##/A-1+' ratings on Tasman. - Tasman's solid financial management, exceptional liquidity coverage, and New Zealand's excellent institutional settings continue to support the ratings....

Research Update