Sundsvall (Municipality of)

This report does not constitute a rating action. Overview Credit context and assumptions Base-case expectations --Sector-wide risks have lessened on the back of strong central government support, as well as planned and already implemented initiatives to combat structural issues. --As a result of continued central government support and strong tax revenue growth, S&P Global Ratings expects Sundsvall will maintain robust operating performance through 2024 and comply with the balanced budget requirement. --We expect the municipality will prove resilient against weaker macroeconomic conditions. --High investment needs in the municipality and the company sector will lead to a gradual, albeit moderate, increase in the nominal debt burden. --We expect Sundsvall will remain committed to its financial policies supporting the strong liquidity position.

...We expect Sundsvall's operating performance will remain robust, albeit gradually weakening, through 2024. This will be a result of diminishing central government grants and higher expenditure growth caused by a return to more normal demand for municipal services as the pandemic fades. That said, we expect the municipality will continue implementing efficiency measures to address budgetary deficits in the municipal boards, meet internal surplus targets, and report balanced budgets. We project a gradually expanding debt burden through 2024 because of continued high investment needs at the municipality and the company sector. However, we expect Sundsvall will remain committed to its financial policies that will mitigate debt build-up and support its strong liquidity position. In addition, a significant share of the in-house bank's debt has been on-lent to financially strong companies....

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