CITY OF CAPE TOWN METR MUNICIPALITY - Moody's Confirms Ratings for City of Cape Town with a Negative Outlook

Moody's Confirms Ratings for City of Cape Town with a Negative Outlook

   THE CITY OF CAPE TOWN
   (A Municipality in terms of Section 155 of the Constitution of
   the Republic of South Africa, duly established by notice in the
   Provincial Notice 479/2000 dated 22nd September 2000, of the
   Western Cape, pursuant to Section 12(1) and Section 14(2) of the
   Local Government: Municipal Structures Act, 1998 (Act 117 of
   1998) as amended)
   Instrument Code:     CCT01    ISIN: ZAG000054982
   Instrument Code:     CCT02    ISIN: ZAG000068719
   Instrument Code:     CCT03    ISIN: ZAG000075995
   Instrument Code:     CCT04    ISIN: ZAG000145376


   (“CCT”) or (“the Municipality”)



Moody's   Confirms   Ratings    for   City   of   Cape   Town   with   a   Negative
Outlook

Noteholders are advised that Moody's Investors Service (“Moody’s”)
has, as at 29 March 2018 confirmed the long-term global scale
ratings of 10 South African regional and local governments with
stable outlooks. In the case of the City of Cape Town, Moody’s
maintained the negative outlook, due to the current challenges
associated with the water crisis”. It has also confirmed the global
scale short-term ratings of Prime-3 for City of Cape Town. The
ratings conclude the review for downgrade by Moody’s which commenced
on 28 November 2017.


Moody’s decision to confirm the global scale ratings for the
regional and local governments relates to the sector’s close
financial and operational linkages with the sovereign, who’s rating
was also confirmed as Baa3 on 23 March 2018.
The rationale for maintaining a negative outlook forCity of Cape
Town is as a result of the uncertainty over whether the city will be
able to avoid “Day Zero”, where the water supply could be cut and
residents would have to collect water from water stations.
Revenue from water and sanitation sales will be further impacted if
this takes places, as well as the costs of operating and
administrative costs of distributing emergency water supplies, which
will place further pressure on the city’s budget.
Moody’s will continue to closely monitor developments around these
issues. More details of these ratings can be accessed through
Moody’s website on:

www.moodys.com




Cape Town
4 April 2018

Debt Sponsor
The Standard Bank of South Africa Limited

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