(Reuters) - The winning location for Amazon.com’s $5 billion second headquarters project and its promise of up to 50,000 new jobs will likely receive a credit boost, S&P Global Ratings said on Thursday.
The largest e-commerce retailer announced last week that it had pared the list of 238 proposals for its so-called HQ2 project down to 19 metropolitan areas in the United States and one in Canada.
“We think the arrival of HQ2 could have significant and sustained positive effects on the chosen community’s economic characteristics, which could affect local government credit quality in a variety of ways under our local government general obligation (GO) criteria, particularly for communities with relatively low economic scores,” S&P said in a report.
Short-listed candidates for the headquarters include several with AAA ratings, such as Boston and Virginia’s Fairfax County, ranging down to BBB-plus-rated Chicago.
The credit rating agency said that the incentive packages Amazon is seeking from the governments for the project could offset local gains as a result of direct costs or foregone revenue. S&P said that taxpayer and employment concentration from the new Amazon headquarters, although unlikely, could pose a long-term risk to the winning government’s credit quality.
Amazon has said it expects to pick a location this year.
Reporting By Karen Pierog; Editing by Daniel Bases and Grant McCool