Region Stockholm maintains its high credit rating of AA+ in the long term and A-1+ in the short term. This is according to the independent rating agency Standard & Poor's announcement on 1 April.
- Standard & Poor's (S&P) believes that Region Stockholm will be able to withstand the financial stress resulting from the two-year pandemic. Region Stockholm has handled the challenges well, has a robust economy and many years of a balanced budget, which is the basis for the high credit rating, says Carina Lundberg Uudelepp, Regional Director of Region Stockholm.
- S&P considers Region Stockholm to have satisfactory debt management and liquidity, underpinned by prudent and risk-minimising financial management. With this high rating, the region is well placed to continue to finance future investments on favourable terms," says Katarina Holmgren, CFO and Chairman of the Board of AB SLL Internfinans within Region Stockholm.
At the same time, S&P describes uncertainty in the form of macroeconomic factors influenced by the international security situation. In addition, challenges are mentioned in the form of the cost equalisation system, whereby the Region Stockholm pays for other regions, increased inflation and the consequences of the pandemic affecting both health and medical care and public transport. Within health and medical care, there is mention of care that has been postponed and is to be resumed, while within public transport S&P notes that demand has not yet returned to the pre-pandemic level.
At the same time, S&P mentions positive external factors, such as the recovery of the labour market, increased tax revenues and increased government support related to the pandemic. At the same time, S&P notes that only 33% of lost public transport revenues due to the pandemic have been covered by government subsidies.
In conclusion, cash management, reduced cost increases and strong financial management are factors highlighted by S&P as positive reasons for Region Stockholm’s high rating. Other factors considered by S&P include a strong operating cash flow leading to a lower debt burden, despite large investments that are planned for the coming years.
About the Standard & Poor's rating
Standard & Poor's conducts a credit assessment twice a year and reports once a year, in April, describing the credit rating. Standard & Poor's has confirmed the high creditworthiness of Region Stockholm for several years. Since 2007, Region Stockholm has had the second highest long-term rating of AA+. The short-term rating is the highest, namely A-1+.