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Moody's Rating Action- CTMM
THE CITY OF TSHWANE METROPOLITAN MUNICIPALITY
(A municipality as described in section 2 of the Local Government Municipal Systems Act, 2000, duly
established in terms of Notice No. 6770, promulgated in the Provincial Gazette Extraordinary of 1
October 2000 in terms of section 12(1) read with section 14(2) of the Local Government : Municipal
Structures Act, 1998, as amended)
(Issuer code: CTMM)
(“City of Tshwane” or the “Issuer”)
MOODY’S RATING ACTION
Moody’s has on 23 September 2020 downgraded by one notch the City of Tshwane's long-term issuer GSR
to Ba2 from Ba1 and maintained the negative outlook. Moody's also downgraded the long-term issuer NSR
to Aa3.za from Aa2.za, and affirmed both the short-term issuer GSR and NSR ratings of NP and P-1.za,
respectively.
Moody’s has stated that the one notch downgrade reflects the sustained weakening of the issuer's operating
performance and liquidity due to the impact of the coronavirus pandemic . Based on the preliminary results,
Moody’s noted that the City of Tshwane’s revenue collection was impacted by the coronavirus pandemic
which resulted in a significant decrease in liquidity with the operating performance coming under pressure
in 2020 due to lower services (electricity and water) demand and significant increases in bad debt provisions.
Moody’s advised that the negative outlook reflects the downside risks related to a potentially more severe
and long-lasting impact of the coronavirus shock on the issuer's operating performance and liquidity through
lower services demand and revenue collection.
City of Tshwane's Ba2 ratings are based on an underlying baseline credit assessment (BCA) of ba2 as well
as Moody's assessment of a low level of extraordinary support coming from the Government of South Africa
(Ba1 negative).
For additional details on the ratings action please see the press release by Moody’s on 23 September
2020 titled “Rating Action: Moody's downgrades the ratings of Ekurhuleni, Tshwane and ERWAT”,
available on the following link: https://www.moodys.com/research/Moodys-downgrades-the-ratings-of-
Ekurhuleni-Tshwane-and-ERWAT--PR_432479
Following the recent updates, the City of Tshwane’s current Credit Rating is as follows as per the Moody’s
report:
Rating type Long term Short term Category Rating outlook Rating action
Issuer Aa3.za P-1.za Investment grade Negative Affirmation
Johannesburg
25 September 2020
Debt Sponsor
Absa Bank Limited (acting through its Corporate and Investment Bank division)
Date: 25-09-2020 01:50:00
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