1993 Credit Rating Report - Laserfiche WebLink

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Page 2 A draft rating opinion was issued in November. Administration reviewed the text of the draft C.B.R.S. report. Correspondence was issued correcting the text, confirming assumptions, challenging C.B.R.S. assertions, and offering changes in the text which more clearly conveyed existing conditions, Following agreement on the contents of the report and confirmation of the accuracy of the financial data contained therein, C.B.R,S, formalized its rating opinion and issued the County of Essex report. Rating Opinion The rating of County of Essex debentures was re- affirmed at A- with a Positive rating outlook. There are two elements to the rating. The A- signifies that County of Essex debentures are of a high quality (conversely low risk). Being rated in the A category is an achievement in itself. Over the last 12 months, municipal debt, as a credit category, has been downgraded, particularly in Ontario, Although many factors of a specific and general nature account for the caution expressed by C.B.R.S. relative to municipal obligations, overriding influences are the fiscal difficulties of the federal and provincial governments, and the cascading nature of federal and provincial cost containment measures. A continuation of an A category rating is testimony to the success of initiatives introduced by Council to insulate itself, to the degree possible, from external fiscal pressures. Perhaps most important is the rating outlook element of the C.B.R.S. opinion. I am advised by Eugene Williams of C.B.R.S., that the County of Essex is one of only three rated municipalities throughout Canada to have a Positive rating outlook (the City of Windsor also has an A- rating with a positive rating outlook). A Positive rating outlook means that conditions exist, which if fully realized, will strengthen local economic conditions and further ameliorate the municipality's ability to meet debt obligations. In other words, economic conditions are on balance relatively good, and are likely to improve. By extension, the more positive the rating the lower the risk, and ultimately lower borrowing costs. A more subtle benefit is the economic development interest generated by a uniquely positive rating outlook. Although quantification is difficult, rating opinions are widely circulated in the private investment community, and to have both the City of Windsor and the County of Essex rated so positively, speaks well for the long -term strength of the region in whole.