Johannesburg - Rating agency Moody’s on Thursday released
its annual credit report on the City of Cape Town‚ in which it praised the
city’s good budgetary results and liquidity position.
It said the city’s rating of Aa3.za/Prime-1.za reflected its
large and diversified economic base and its historically prudent financial
governance‚ which led to good budgetary results and a sound liquidity position.
"Cape Town's ratings reflect the strong cash flows it
has generated over the last few years‚ underpinned by its consistent revenue
collection. This has helped to strengthen its liquidity profile and avoided new
debt in 2011 and 2012‚" says Kenneth Morare‚ Moody's lead analyst for the
City of Cape Town.
Moody’s said the continued fiscal consolidation in 2010-12
(following economic crisis) strengthened the city's financial performance. The
city reported a gross operating margin of 8.1% and a cash financing surplus of
4.7% in FY2012.
"Going forward‚ however‚ we expect that debt levels
will rise moderately to finance the city's large capex programme in
2013-15‚" said Morare.
The rating agency's report is an update to the markets and
does not constitute a rating action.
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