Moody’s Investors Service has improved Cape Town’s credit rating from stable to positive, citing the City’s success in strengthening revenue collection.It confirmed Cape Town’s Ba3 long-term issuer and senior unsecured debt ratings, which are one notch below South Africa’s sovereign rating of Ba2, which is itself two notches below investment grade.
‘The positive outlook reflects our view that Cape Town’s financial performance could further strengthen over the next 12-18 months, surpassing our baseline forecasts,’ the agency said.hereMoody’s stated that the City’s initiatives such as the use of prepaid electricity meters from residential properties were expected to further diminish the risks of nonpayment or late payment, which the ratings agency regards as a persistent challenges for SA municipalities.
Moody’s based its rating on the city’s consistently solid and rising operating and financial performance, citing stability in its liquidity situations. The city has modest debt levels, yet debt is predicted to steadily rise in the medium term.