The international bond credit rating firm Moody’s Investors Service released a report this week reaffirming the City of Toronto’s credit rating of Aa1 with a stable outlook. An Aa1 rating is one level below Moody’s highest rating of Aaa.
The rating was based on Toronto’s large, diversified economy and broad tax base, continued strong year-end operating results, sound governance and prudent fiscal planning, as well as a healthy liquidity profile. The stable rating outlook reflects the firm’s view that the city will continue to show strong operating outcomes and maintain high debt affordability.
Moody’s report also acknowledges challenges faced by the city, such as a backlog of deferred capital spending and a growing population combined with limited revenue growth. However, it notes that the city’s debt burden is comparable to highly rated Canadian and international municipal peers.
“Toronto is the economic engine for Ontario and Canada and an important participant in global markets. This rating is a testament to our sensible financial stewardship. It also demonstrates our continued financial stability and why it is so important that we stay the course on our responsible budgeting for the good of our city and our residents,” said Toronto Mayor John Tory.