Moody’s placed Ekurhuleni at Aaa.za/Prime-1 national scale rating, a four notch upgrade from a previous rating of A1.za/Prime-1.
The city also received a global scale rating of Baa2/Prime-2.
The good credit profile, in terms of Moody’s, means that Ekurhuleni has an “extremely strong” capacity to meet its financial commitments.
This allows the city to raise debt at favourable rates, putting less onerous debt repayment costs on residents.
“This rating makes it easier for the city to compete in the international bond markets as well as other project finance and investment opportunities to address infrastructure funding,” said city manager Khaya Ngema.
Ngema said the rating reflects the city’s prudent financial management which also saw it awarded two consecutive clean audits.
Ekurhuleni is rated at the high end of the range of South African municipalities.
The municipal debt and debit service levels are relatively lower than the median of rated metropolitan municipalities.
Moody’s said in its report that “EMM reflects its relatively large economic base, strong liquidity and traditionally conservative approach to financial management. However, the ratings also reflect the challenges associated with growing, albeit moderate, debt levels.”
The agency noted the city’s diverse and resilient industrial base stretching from Springs to Wadeville and Isando and hosting world-class manufacturers of glass, breakfast cereal and steel.
The city and five of the entities including Brakpan Bus Company (BBC) responsible for municipal bus service in the eastern region, Ekurhuleni Development Company (EDC) responsible for social housing, and Germiston Housing received two consecutive years of clean audits.
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