METRO Vancouver on Tuesday congratulated the Municipal Finance Authority of British Columbia (MFA) for receiving affirmation of its AAA credit rating from major credit-rating agencies Fitch Ratings, Standard & Poor’s and Moody’s Investors Service.
“I am very proud of the work the Municipal Finance Authority of British Columbia does to maintain its high credit ratings and ensure the right financial tools are available at the lowest possible cost to support B.C.’s local governments,” said Director Malcolm Brodie, the authority’s Chair.
The MFA is the exclusive lender of long-term debt to B.C. municipalities, who borrow through their respective regional districts, which in turn borrow from the authority. Metro Vancouver and its member jurisdictions make up almost 50 per cent of the authority’s financial position. The MFA also provides loans to regional hospital districts, and has provided loans in the past to TransLink.
The three major credit-rating agencies review the MFA each year. The AAA credit rating, the highest possible, is assigned to debt issuers that have the most capacity to repay investors, and whose good financial position gives them the lowest risk of default. As a result, MFA clients are able to access capital financing at the lowest possible rates.
“Maintaining a AAA credit rating is very important for the financial sustainability of Metro Vancouver’s member jurisdictions, because it ensures the availability of low-cost funding for key infrastructure and community projects,” said Sav Dhaliwal, Chair of Metro Vancouver’s Board of Directors.
Affirmation of the AAA credit ratings, despite the COVID-19 pandemic, recognizes not only the strength of the MFA but also the fiscal strengths, policies and practices of the local governments that borrow from and invest in it. MFA’s outlook has also been deemed stable.
MFA is characterized by strong management and a robust institutional framework with strong credit protection mechanisms and high levels of liquidity from cash and investments that ensure cash flow coverage. It also has a high degree of financial autonomy under provincial statutes as a taxing authority.