ZURICH - The city keeps its perfect credit score, but the warning light is on. S&P Global Ratings confirmed Zurich's AAA long-term rating and its A-1+ short-term rating, the highest grades on the scale, and at the same time lowered the outlook from stable to negative.
The agency has rated Switzerland's largest city since 2019, lifted it to AAA in 2023 and confirmed that top mark in 2024 and 2025. Monday's review leaves the grade untouched for a fourth year and changes the direction of travel instead.
One in three
Should the city fail to stabilise its finances within the next two years, the analysts put the probability of an actual downgrade at one in three. Losing the AAA and slipping to AA+ would be expensive: Zurich borrows on the strength of its name, and even a small premium on that debt would crowd out money the city would rather spend elsewhere.
Finance chief Daniel Leupi said the verdict came as no surprise. The S&P perspective, the Green city councillor told reporters on Monday morning, matches the city council's own assessment of the situation.
Cuts already on the table
The council had signalled its answer at the end of September, when Leupi presented the budget. The funds earmarked for property purchases will fall from CHF 600 million to CHF 150 million a year from 2027, and several other projects are to be postponed for financial reasons. S&P explicitly welcomed the stricter prioritisation of investments and spending.
The shift will be felt in housing policy, where the city has been buying apartment buildings to grow its nonprofit stock, most recently 64 apartments in Seebach. A smaller annual purchase fund means fewer such deals. For now, the agency still counts Zurich among the wealthiest and most competitive urban regions in the world. The negative outlook is a reminder that even a AAA city has to earn its grade every year.