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BICITY - City of Cape Town - Credit Rating

Release Date: 08/07/2011 15:10
Code(s): JSE
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BICITY - City of Cape Town - Credit Rating City of Cape Town Credit Rating Moody`s issues annual credit report on City of Cape Town (South Africa) Johannesburg, June 29, 2011 - In its annual report on the City of Cape Town, Moody`s Investors Service says that Cape Town`s Aa2.za/P-1.za national scale issuer and debt ratings reflect the city`s strong budgetary performance and good liquidity position that are underpinned by large and diversified economic base, coupled with historical strong financial governance. The rating outlook is stable. "Consistent fiscal discipline and expenditure rationalisation has ensured regular cash flows and maintenance of strong cash reserves in FY2010," says Kenneth Morare, Moody`s lead analyst for the City of Cape Town and co-author of the report. "The ratings on the City of Cape Town also reflect moderate debt levels, which are, however, expected to increase due to the city`s sizeable capital expenditure program in the medium-term," adds Mr Morare. The City of Cape Town`s indebtedness is projected to amount to ZAR5,548 million (US$793 million) or 29% of operating revenue for the financial year ending (FYE) 30 June 2011 - a negligible decrease on debt levels of FY2010. Strong cash flows enabled the city to self-finance capital investments in FY2010. Cape Town is the second-largest city in South Africa, with total revenue of ZAR18.7 billion (US$2.7 billion) for FYE 2010. The city has a population of 3.5 million, which accounts for 70% of the Western Cape Province and 7% of South Africa. Cape Town`s unemployment level is estimated at around 23.5%. The rating agency`s report is an update to the markets and does not constitute a rating action. Moody`s National Scale Ratings (NSRs) are intended as relative measures of creditworthiness among debt issues and issuers within a country, enabling market participants to better differentiate relative risks. NSRs differ from Moody`s global scale ratings in that they are not globally comparable with the full universe of Moody`s rated entities, but only with NSRs for other rated debt issues and issuers within the same country. NSRs are designated by a ".nn" country modifier signifying the relevant country, as in ".za" for South Africa. For further information on Moody`s approach to national scale ratings, please refer to Moody`s Rating Implementation Guidance published in August 2010 entitled "Mapping Moody`s National Scale Ratings to Global Scale Ratings." NOTE TO JOURNALISTS ONLY: For more information, please call one of our global press information hotlines: New York +1-212-553-0376, London +44-20-7772-5456, Tokyo +813-5408-4110, Hong Kong +852-3758-1350, Sydney +61-2-9270-8141, Mexico City 001-888-779-5833, Sao Paulo 0800-891-2518, or Buenos Aires 0800-666-3506. You can also email us at mediarelations@moodys.com or visit our web site at www.moodys.com. Johannesburg Kenneth Morare Analyst Sub Sovereign Group Moody`s Investors Service South Africa (Pty) Ltd. JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 London David Rubinoff MD - Sub-Sovereigns Sub Sovereign Group Moody`s Investors Service Ltd. JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 Moody`s Investors Service South Africa (Pty) Ltd. The Forum 2 Maude Street 2196 Sandton Johannesburg South Africa JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 Date: 08/07/2011 15:10:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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