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Regional Credit Rating Improvement Program

Improving Creditworthiness of Subnational Authorities in Latin America: Using Peer-to-Peer Assistance David Grossman Director, International Programs ICMA. Regional Credit Rating Improvement Program Funded by World Bank, Public-Private Infrastructure Advisory Facility (PPIAF)

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Regional Credit Rating Improvement Program

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  1. Improving Creditworthiness of Subnational Authorities in Latin America: Using Peer-to-Peer AssistanceDavid GrossmanDirector, International ProgramsICMA

  2. Regional Credit Rating Improvement Program • Funded by World Bank, Public-Private Infrastructure Advisory Facility (PPIAF) • Implemented by ICMA México-Latinoamérica • What are the essential elements of the peer-to-peer approach? • How was the peer-to-peer approach implemented in Mexico, Costa Rica, and Argentina? • What was the impact on participating subnational authorities?

  3. Essential Elements of Peer Learning: • ICMA CityLinks Model • Philosophy: Cities learn best from other cities

  4. CityLinks Process • Programmatic selection criteria • Intention to borrow for infrastructure • Commitment to reform • Selection of partners • Exchange visits • Diagnostic assessment • Definition of work plan • Direct technical assistance • ICMA facilitation • Documentation of experience • Regional workshops

  5. RCRI Partnerships • Mexico Pilot • State of Jalisco – Phoenix, AZ • State of Guerrero – El Paso, TX • Municipality of Puebla – Burlingame, CA, and Genesee County (MI) Road Commission • Costa Rica • Municipality of Cartago and regional electric utility (JASEC) – El Paso, TX • Municipalities of San Carlos and Esparza – Burlingame and the Genesee County Road Commission • Argentina • Municipality of Mendoza and province of Salta – Santa Fe County, NM

  6. Impact of RCRI Program • Established long-term capital improvement plans • Established multi-year budgets • Developed written debt and budget policies • Two Mexican entities kept their credit ratings and obtained a line of credit at a time when many ratings were being lowered

  7. Practitioner’s Guide • Outlines the management policies • and practices that affect an entity’s • creditworthiness • Provides step-by-step guidelines • for reviewing management issues • relating to debt, liquidity, financial • controls, and other factors • Provides model financial management • policies that address areas in need of • improvement

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