| Fri 8 Jul 2011, 15:10 | | BICITY - City of Cape Town - Credit Rating |
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BICITY
BICITY - City of Cape Town - Credit Rating
City of Cape Town Credit Rating
Moody`s issues annual credit report on City of Cape Town (South Africa)
Johannesburg, June 29, 2011 - In its annual report on the City of Cape Town,
Moody`s Investors Service says that Cape Town`s Aa2.za/P-1.za national scale
issuer and debt ratings reflect the city`s strong budgetary performance and good
liquidity position that are underpinned by large and diversified economic base,
coupled with historical strong financial governance. The rating outlook is
stable.
"Consistent fiscal discipline and expenditure rationalisation has ensured
regular cash flows and maintenance of strong cash reserves in FY2010," says
Kenneth Morare, Moody`s lead analyst for the City of Cape Town and co-author
of the report.
"The ratings on the City of Cape Town also reflect moderate debt levels, which
are, however, expected to increase due to the city`s sizeable capital
expenditure program in the medium-term," adds Mr Morare. The City of Cape Town`s
indebtedness is projected to amount to ZAR5,548 million (US$793 million) or
29% of operating revenue for the financial year ending (FYE) 30 June 2011 -
a negligible decrease on debt levels of FY2010. Strong cash flows enabled the
city to self-finance capital investments in FY2010.
Cape Town is the second-largest city in South Africa, with total revenue of
ZAR18.7 billion (US$2.7 billion) for FYE 2010. The city has a population of 3.5
million, which accounts for 70% of the Western Cape Province and 7% of South
Africa. Cape Town`s unemployment level is estimated at around 23.5%.
The rating agency`s report is an update to the markets and does not constitute
a rating action.
Moody`s National Scale Ratings (NSRs) are intended as relative measures of
creditworthiness among debt issues and issuers within a country, enabling market
participants to better differentiate relative risks. NSRs differ from Moody`s
global scale ratings in that they are not globally comparable with the full
universe of Moody`s rated entities, but only with NSRs for other rated debt
issues and issuers within the same country. NSRs are designated by a ".nn"
country modifier signifying the relevant country, as in ".za" for South Africa.
For further information on Moody`s approach to national scale ratings, please
refer to Moody`s Rating Implementation Guidance published in August 2010
entitled "Mapping Moody`s National Scale Ratings to Global Scale Ratings."
NOTE TO JOURNALISTS ONLY: For more information, please call one of our global
press information hotlines: New York +1-212-553-0376, London +44-20-7772-5456,
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You can also email us at mediarelations@moodys.com or visit our web site at
www.moodys.com.
Johannesburg
Kenneth Morare
Analyst
Sub Sovereign Group
Moody`s Investors Service South Africa (Pty) Ltd.
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
London
David Rubinoff
MD - Sub-Sovereigns
Sub Sovereign Group
Moody`s Investors Service Ltd.
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
Moody`s Investors Service South Africa (Pty) Ltd.
The Forum
2 Maude Street
2196 Sandton
Johannesburg
South Africa
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
Date: 08/07/2011 15:10:01 Produced by the JSE SENS Department.
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