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<br />7 <br />- ----- <br />',;L\NlJ.\RlJ CANADiAN RATINGS <br />---- <br />" h )( lIZ's <br />- <br />Publication date: 10-Aug-2005 <br />Primary Credit Analyst(s): Nikola Swann, Toronto (1) 416~07-2582; nikola_swann@standardandpoors.com <br />Secondary Credit Analyst(s): Suleman Souleyman, Toronto (1) 416~7-2514; suleman_souleyman@standardandpoors.com <br />Reprinted from RatingsDirect <br />Essex (County of) <br />Maior Rating Factors ISSUER CREDIT RATING To From <br />Rationale Essex (County of) <br /> Issuer Credit Rating AA-/Stable/- A+/Positive/- <br />Capital Expenditure Proaram. <br />Liauiditv. And Debt <br />Outlook Issuer credit rating history: <br /> Aug.5,2005 AA- <br /> May 1, 2001 A+ <br /> Major Rating Factors <br /> Strengths: <br /> . Very low current and low expected debt burden <br /> . Very good liquidity <br /> Weaknesses: <br /> . Low economic diversification <br /> . Affected by financial profile of lower tier member municipalities <br /> Rationale <br /> The rating on the County of Essex, located at the southwestern tip of the <br /> Province of Ontario, reflects the county's very low current and low expected <br /> debt burden, good liquidity levels, good budgetary performance, and <br /> conservatively managed capital program. The rating is constrained, however, <br /> by the low level of economic diversification within the county and by the effect <br /> on the county of the financial profile of its lower tier member municipalities. <br /> Essex has a very low current debt burden. The county's C$20.5 million of <br /> direct debt outstanding in 2004 amounted to only 22% of operating revenue, <br /> the vast majority of which is self-supported. Its 2004 combined debt burden <br /> (including lower tier debt) was higher but still low by peer comparison, at <br /> about 44% of combined operating revenue. Planned capital expenditure is not <br /> expected to significantly increase the county's debt burden. <br /> Essex also has very good liquidity levels and has been, in fact, a net creditor <br /> for many years, a position it retained in 2004. Although Essex is planning to <br /> gradually reduce certain reserves in the coming years, the county is <br /> nevertheless expected to maintain liquidity that is well above average. <br /> Essex has a good record in terms of budgetary performance and the county's <br /> 2004 operating surplus continues this tradition. Solid operating surpluses <br /> provide Essex with the means to fund its capital expenditure largely from <br /> internal sources, reducing debt issuance needs. <br />Page 1 of 4 <br />