Moody's pours cold water on Ekurhuleni, Tshwane improving junk status
The rating agency said the weak liquidity of both municipalities and poor budget management, means future downgrades are more likely.
The City of Tshwane.
JOHANNESBURG - Credit rating agency Moody’s has poured cold water on the possibility of Ekurhuleni and Tshwane municipalities improving their junk status.
On Wednesday, Moody’s downgraded Ekurhuleni a notch further in its ratings while placing Tshwane on review for a downgrade.
The Ekurhuleni municipality has rejected Moody’s ratings calling it unsolicited, while the capital city says it is working on improving its financial controls.
In its report, Moody’s said an upgrade of either of the metros' rating was unlikely.
The rating agency said the weak liquidity of both municipalities and poor budget management, means future downgrades are more likely.
Municipalities across the country issue security bonds on the Johannesburg Stock Exchange (JSE) to raise revenue.
In exchange, the municipalities need to comply with the JSE listing deadlines by publishing their audited financial results on time.
Both the Gauteng metros missed the 29 February deadline.