Zurich First-HandS&P keeps Zurich at AAA but lowers the outlook to “negative”
The rating agency S&P Global still gives the city its top credit rating. Because of high investment and rising debt, it is now considering a downgrade.
The rating agency S&P Global Ratings has reviewed the creditworthiness of the City of Zurich again. The rating stays at the top grade, but the outlook has been lowered from “stable” to “negative”. If the city fails to stabilise its finances, the agency will consider a downgrade.
| Before | Now | |
|---|---|---|
| Long-term rating | AAA | AAA |
| Short-term rating | A-1+ | A-1+ (highest level) |
| Outlook | stable | negative |
S&P has rated the city since 2019. It raised the long-term rating to AAA in 2023 and confirmed it in 2024 and 2025.
Why the outlook was lowered
According to the city, Zurich plans very high investment over the next few years while its deficits grow. The lower cash flows it expects are not enough to pay for the investment, so the city expects its debt to rise. This was taken into account in the rating. S&P views positively the city executive’s (Stadtrat) measures to prioritise investment and spending. According to the press release, a clear limit on debt growth would likely have a positive effect on the outlook.
Daniel Leupi, head of the finance department, says S&P’s view matches that of the city executive. A target of CHF 1.5 billion of investment a year is meant to stop debt from rising too sharply.
The figures behind this are in the 2027 budget: the financial plan shows deficits of around CHF 600 million a year until 2030.