Moody's rates Ekurhuleni notes Aa2.za

Moody's Investors Service said it assigned to the municipality of Ekurhuleni Metro a long-term debt rating of Aa2.za on the South African national scale to the upcoming ZAR 800 million medium-term notes drawdown of the second bond issuance within the existing ZAR 4 billion domestic medium-term note program launched in July 2010.

The upcoming notes are fixed-rate senior unsecured notes due March 2021 and will be listed on the Johannesburg stock exchange.

The proceeds will be used to finance the region's investment spending needs, Moody's said.

In addition to the relative strength of the local economic base, Ekurhuleni's Aa2.za/prime-1.za national scale issuer and debt ratings also reflect the traditionally conservative financial management approach and its moderate debt levels, the agency said.

The ratings also consider the fiscal challenges arising from low, albeit gradually improving, revenue collection rates and the municipality's high expenditure requirements, Moody's said.

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