City of Ekurhuleni downgraded

Moody’s announced that it had downgraded the City of Ekurhuleni’s long-term issuer, senior unsecured, national scale, and baseline credit assessment ratings.

It has also placed the City of Ekurhuleni’s ratings on review for further downgrade in the future.

Moody’s also placed the City of Tshwane’s long-term issuer, national secure long-term, and baseline credit assessment ratings on review for downgrade.

These downgrades result from both cities not submitting their audited financial statements to the JSE by the deadline of 29 February 2024.

This deadline marks 7 months after the financial year-end of both cities.

The JSE stated on 1 February that the debt securities of both cities would be suspended if they did not submit their financials by this deadline.

Although both cities failed to submit their audited financials by the JSE’s deadline, no debt securities have yet been suspended from the JSE.

Moody’s decided to place both Ekuruleni and Thswane under further credit rating downgrades, reflecting their view of increased debt acceleration and potential default on their listed debt notes.

Moody’s stated that weakening governance and management practices in the City of Ekurhuleni increased the risk of default even further.

The City of Ekhuruleni and the City of Tshwane stated that they would be ready to submit their financial statements by 31 March 2024.