1 minute read
19 Jul 2014
9:16 am

Johannesburg ‘financially stable’ – Fitch Ratings agency

The City of Johannesburg is financially stable, despite pressure from high unemployment and demographic growth, Fitch Ratings agency said on Friday.

FILE PICTURE: An aerial view of Johannesburg, including the Ponte Tower and the Hillbrow Tower. Picture by Michel Bega

It maintained the city’s long-term local currency issuer default rating (IDR) at ‘BBB’ with a stable outlook, it said in a statement.

IDRs are used to indicate an entity’s vulnerability to default on financial obligations.

A ‘BBB’ rating indicates that expectations of default risk are currently low.

Fitch said the ratings reflected the city’s important status as South Africa’s largest city, and its sound management with a fair degree of sophistication.

The metropolitan municipality had successfully tested access to capital markets and had a strong and stable financial profile, with sustainable debt and improved liquidity.

“The ratings also take into account an operating environment that is under pressure from high unemployment and strong demographic growth,” Fitch said.

– Sapa