The international credit rating company Standard & poor’s confirmed today that the City of Stockholm keeps its short and long term rating AAA/Stable and A-1+ respectively.
The ratings on Stockholm incorporate Standard & poor's view of the city's "very positive" financial management and revenue flexibility, "positive" liquidity, and their assessment of the Swedish institutional framework as "predictable and supportive."
Standard & Poor's also states that:
"...the city's rapidly expanding population requires sizable investments in infrastructure, housing, and real estate for public services. Still, we consider the city's budgetary performance to be sound due to its excellent revenue flexibility and strong budgetary discipline. We view Stockholm's debt position as modest, albeit moderately increasing, supported by the city's significant net creditor position and its financially strong and asset-rich satellite companies. Given the financial strength of these companies, we view Stockholm as having modest contingent liabilities".
Rating overview by Standard & Poor's:
- Sweden's capital city of Stockholm will retain robust budgetary performance, in our view, as sound operating balances and substantial capital revenues are offsetting the city's budgetary pressures from increasing capital expenditures and contributions to the Swedish local and regional government (LRG) equalization system.
- We regard positively that Stockholm's comprehensive budgetary flexibility, together with our view of "very positive" financial management, indicate that the city's investments will only increase tax-supported debt to moderate levels through 2016.
- We are affirming our 'AAA/A-1+' and 'K-1' ratings on Stockholm.
- The stable outlook reflects our expectation that Stockholm will post a persistently solid budgetary performance, require only moderate debt financing, and uphold prudent debt and liquidity management over our 2014-2016 forecast period.