Monday, May 26, 2008

City retains its high credit rating

By Anele Siwa
26 May 2008

The City of Cape Town has received a new credit rating from Moody’s, which assigns a national scale rating of Aa2.za with a stable outlook, to the City.

“This is the same rating that the city received last year,” says Mayoral Committee member for Finance, Councillor Ian Neilson .

According to Neilson this “Double A” rating shows that the City demonstrates a very strong creditworthiness and a low likelihood of credit loss relative to other domestic issuers.

Once again, Cape Town, alongside Ekurhuleni, demonstrates the highest credit rating of all local authorities in South Africa.

Neilson says the rating reflects the present institutional framework characterised by a large measure of discretionary revenue, demonstrating predictability and stability that avoid detrimental changes in municipal budgets.

“The rating is also underpinned by a diversified economy signifying sound growth. Benefiting the economy is the natural beauty of the region, a major tourist attraction that should continue to support economic growth and stimulate job creation,” he added.

According to Neilson the credit rating puts the City in a strong place ahead of its first bond issue of R1 billion, planned for floatation on the Bond Market of SA, in June this year.

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