Moody's rates Ekurhuleni bond Aa2.za

Moody's Investors Service said it assigned long-term ratings of Aa2.za to Ekurhuleni Metro's upcoming ZAR 4 billion domestic medium-term note program and to the planned bond issuance of ZAR 815 million. The upcoming notes are fixed-rate senior unsecured notes due July 2020 and will be listed on the Johannesburg Stock Exchange. Moody's also said it assigned a national-scale short-term issuer rating of P-1.za to the Metropolitan Municipality of Ekurhuleni.

Based on revenue of ZAR 11.6 billion for the year ending June 2009, Ekurhuleni ranks fifth among the six metropolitan municipalities in South Africa, Moody's said.

The ratings are underpinned by the municipality's relatively large economic base, its moderate but growing debt levels and traditionally conservative financial management approach, the agency said.

The ratings also consider the fiscal challenges arising from low - albeit gradually improving - revenue collection rates as well as the municipality's high expenditure requirements and their impact on the city's financial performance and liquidity position, Moody's said.

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