Johnathan Paoli
The City of Ekurhuleni has rejected Moody’s Investors Services recent credit rating and expressed its intention to possibly sue for reputational damage following the ratings agency’s downgrade of the city to junk status.
Moody’s revealed on Wednesday the metro’s credit ratings were reduced further into junk status, which reflected an increased risk of the metro’s financial decline amid weakening governance.
The ratings agency lowered Ekurhuleni’s long-term issuer (domestic) and senior unsecured ratings to Caa2 from Caa1 and its baseline credit assessment (BCA) to Caa2 from Caa1.
A Caa2 credit rating meant an entity’s debt was rated as poor quality and very high credit risk. It was also eight notches into non-investment grade or junk status in terms of Moody’s ratings.
Moody’s also placed Ekurhuleni’s ratings and BCA on review for further downgrade, together with putting the City of Tshwane’s ratings on review for a downgrade, with Tshwane currently
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